China Eximbank pledges to loan for Mmamabula Energy Project

Project narrative

In March 2009, CIC Energy announced that it had signed a contract with Shanghai Electric as contractor for engineering, procurement and construction of the Mmamabula Energy Project (MEP). A special purpose vehicle — called Meepong Energy — was established to manage the design, financing, and implementation of the independent power project (IPP), which would involve the development of a 3 billion ton (fully drilled out) coal deposit located in southeastern Botswana. This project includes a ~6.0mtpa run-of-mine open strip coal mine, a 1,320MW power station, and related infrastructure. It is also envisaged that Eskom and the Botswana Power Corporation (“BPC”) will serve as off-takers. The ultimate purpose of this project is to exploit the extensive and proven Mmamabula coalfield in Botswana, which is an extension of South Africa’s Waterberg coalfield. China Eximbank has reportedly indicated interest in financing the project, with China Eximbank financing expected to be covered by an insurance policy from Sinosure. However, it does not appear any debt financing for the project materialized.