- KSE Remains the First and only Independent Power Producer Appointed by the Botswana Power Corporation to Date

LONDON, June 18, 2012 /PRNewswire/ -- Based on its recent analysis of the power generation market, Frost & Sullivan recognises Karoo Sustainable Energy (Pty) Ltd; [KSE] with the 2012 Africa Competitive Strategy Leadership Award. KSE is an independent power producer (IPP) actively pursuing power development projects in Botswana since 2008.

"The company has exhibited a competitive edge over the other entities operating in the same environment, as reflected by its pioneering position of first IPP in Botswana," notes Frost & Sullivan Research Analyst Celine Paton. "Furthermore, the company has managed to negotiate the first Power Purchase Agreement (PPA) with BPC which constitutes a first step to structure the financing of its - 180 MW power generation project."

In 2008, KSE was awarded a 270MW tender, issued by the Botswana Power Corporation, for the development of 270MW emergency power plant. Due to the global economic crisis of 2008-2009, the project was restructured into a 90MW dual fuel (gas and diesel) and 180MW gas power plants. The 90MW became a fast track project jointly developed with BPC and Debswana Diamond Mining Company.

Companies entering a market affected by shortages generally aim to provide innovative interim solutions. The same principle has been applied by KSE as it developed in partnership with BPC and Debswana the Orapa 90 MW emergency power plant. In addition to its initial role as developer, KSE eventually became asset manager of the power station in recognition of its skill wealth and vast experience in IPP markets. In this context, KSE showed flexibility, patience and a strong ability to listen to BPC requirements by leveraging its competitive intelligence.

The Orapa 90 MW power plant was commissioned in August 2011. "The power plant will be used for peak load and will run with diesel in a first stage," adds Paton. "The power plant can alternatively run with gas (sourced from coal bed methane) thanks to the technology used (dual-fuel GE turbines), which should provide substantial operating savings."

The Orapa 90 MW power plant will help alleviate the power deficit that Botswana is facing during peak hours. This will help contributing to the country's economic growth as it will reduce the risk of implementing load shedding measures.

The second power plant of 180 MW (Mmashoro 180 MW) is also planned for development in the medium term. This project will be built, owned and operated by KSE. The related PPA with BPC has been fully negotiated and submitted to the relevant Ministries, for approval and final signature.

Drilling of the first ever horizontal CBM wells in Africa has commenced for the Mmashoro 180MW power station and the first set of wells will enter production in the 4th quarter of 2012. 

When implemented, the Mmashoro 180 MW power plant will significantly increase the country's power supply. It will further offer the possibility to provide base and peak load power thanks to its affordable operating costs (expected to be lower than those of coal-fired power plants).

"Currently, KSE has a small market share in power generation as the Orapa power plant is only to be used for peak load," remarks Paton. "However, as soon as Mmashoro power plant comes on stream, it will become a significant player."

KSE will be the first vertically-integrated IPP in Botswana when it will be able to use its gas sourced from its coal bed methane resources. KSE is a wholly owned subsidiary of Kalahari Energy (Botswana) Ltd, a 50-50 joint venture between Kalahari Energy BVI Ltd and TUTEN, reflecting a perfect combination of complementary experience.

The Competitive Strategy Leadership Award is awarded to the company that has excelled in leveraging competitive intelligence and in executing a competitive strategy that has led to an impact on market share. The company is also commended for its competitive brand positioning (brand strength and unique market position) and for the impact its strategies have had on customer satisfaction/value.

Frost & Sullivan Best Practices awards recognise companies in a variety of regional and global markets for demonstrating outstanding achievement and superior performance in areas such as leadership, technological innovation, customer service, and strategic product development. Industry analysts compare market participants and measure performance through in-depth interviews, analysis, and extensive secondary research to identify best practices in the industry.

About Karoo Sustainable Energy (Pty) Ltd.

KSE is an IPP in Botswana that was formed in 2008 to develop, own and operate a 270MW coal bed methane fired power station in Botswana that would sell capacity and energy to the Botswana Power Corporation under long term off-take agreements.  KSE and its sponsors have extensive experience in developing thermal IPP's from conceptualization through to commercial operation, including the mobilization, hiring and training of a fully capable operations and maintenance staff.

KSE is currently owned 50% each by Kalahari Energy "KE" and Tuma Energy & Environment, a Cyprus company that is the international business vehicle for Tuten Ltd. ("TUMA" or "TUTEN").

KE (www.kalaharienergy.net) has been a pioneer of CBM development in Botswana since 2000 and can be credited for conducting successful initial CBM exploration creating current CBM frenzy in Botswana. KE is also, the only Botswana based group with the capability of providing well completion services for CBM gas production.

TUTEN (www.tutsel.com) is a boutique power project development company based in Istanbul.  Tuten is also the authorized sales representative of GE Aero Energy in Turkey.

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Contact:

Catherine Brassell
Best Practices
Frost & Sullivan
Tel: +4420 79157867
Email: catherine.brassell@frost.com

Same Makuku
Manager Business Development
KS Energy (Pty) Ltd
Plot 20561 Unit 4, Sekotlo Road, Broadhurst, Gaborone, Botswana
P O Box 401907, Gaborone, Botswana

Tel: +267 3180272
Fax: +267 3180336
Cell: +267 72302097
Email: same.makuku@kse.co.bw

SOURCE Frost & Sullivan