Mr. Pego Mosalakatane, Botswana Power Corporation

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PRESENTATION FOR WORKSHOP PRESENTATION FOR WORKSHOP ON VIENNA PROGRAMME OF ON VIENNA PROGRAMME OF

ACTIONACTION

BYBY

PEGO MOSALAKATANEPEGO MOSALAKATANE(BPC PLANNING AND PROJECTS)(BPC PLANNING AND PROJECTS)

28 October 201528 October 2015

PRESENTATION OVERVIEW

1. PROJECT TRIGGERS

2. DEMAND SUPPLY OUTLOOK

3. GENERATION EXPANSION PLAN

4. TRANSMISSION CURRENT GRID OVERVIEW

5. TRANSMISSION GRID NETWORK EXPANSION

a) BRIEF PROJECT BACKGROUND

b) PROJECT PROGRESS

c) PROJECT TIMELINES

d) PROJECT RISKS

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PROJECT TRIGGERS

NATIONAL ENERGY POLICY

NATIONAL DEVELOPMENT PLANS

STRATEGIC PRIORITIES DEMAND FORECAST

SYSTEM STUDIES AND PLANNING

CUSTOMER REQUIREMENTS

Total Supply 591 681 811 943 1207 1234 1366 1366 1366 1246 1246Peak Demand 711 744 773 854 877 902 924 941 959 1003 1017Capacity Balance -120 -63 38 89 330 332 442 425 407 243 229Reserve Margin -20% -9% 5% 9% 27% 27% 32% 31% 30% 20% 18%

The shortfall will be met through non-firm supplies from the region when available (Eskom 100MW); Eskom Emergency (200MW), ZESCO (100MW), EDM (100MW); and NamPower (100MW) until 2018. Extension of the Eskom contract from 1st January 2016 to 31st December 2018 expected to be concluded in Q3 of 2015)

Demand Supply OutlookDemand Supply Outlook

Generation Projects PlanGeneration Projects PlanCapacity

(MW)Timing Remarks

132 2016/17 Refurbishment plan in progressProject preparatory works commenced at the end of September 2015 Three units expected by 2016 and last one by 2017

600 2013All four units taken overMeasures required to comprehensively remedy plant defects. Three year programme

300 2018/19Procurement at an advanced stage

300 2019/20 Prequalification of bidders done Process of engaging Technical Advisors is ongoing.

90 TBAConversion to 24hr operation on CBM. Timing of Commercial Availability of CBM in sufficient quality and quantity to operate a gas fired power station remains unknown.

Sources

Morupule A

IPP Brown Field

IPP Green Field

Coal Bed Methane

Morupule B

RENEWABLE ENERGY PROJECTS RENEWABLE ENERGY PROJECTS Capacity

(MW)Timing Remarks

100 2017/18 EOI in floatation

75MW TBAREFIT Tariff study completed in 2011Capacity:5kW to 5MW (Solar, Biomass, Biogas)Awaiting Cabinet Approval

1.3MW 2012 PV Pilot Project on-grid in operation since August 2012 (Japanese Grant Funding)

Located at Phakalane, Gaborone

Sources Solar Thermal

Draft Energy Policy requires that 15% and 25% of the Electricity Demand be met from Renewable Energy Resources by 2016 and 2030 respectively.

• Feasibility Study completed in March 2013• Central Receiver with Molten Salt as the heat transfer and storage medium.• 100 MWe with 4hrs Thermal Energy Storage• Located at Jwaneng• COD: 2017/18• Project Structure: IPP or PPP?

CSTP PLANT - JWANENGCSTP PLANT - JWANENG

Gemasola - Spain

GABORONE

Francistown

Maun

Selebi-Phikwe

S O U T HA F R I C A

Z I M B A B W E

N A M I B I A

Matimba P/S

Delta

Thamaga

2x21

5km

47km

51km

Tsabong

52km

Morupule A

220kV400kV

132kV

Phokoje

AK 6Orapa

Isang

Tati30km

Morupule B

Katima

Lobatse

Kasane

Bulawayo

Spitzkop

Jwaneng

66kV

Sowa

Mowana

Pandamatenga

HwangeVictoria

ZAMBIA

Gantsi

25km

Kanye

HVDC Westcor

Livingston

Proposed Existing

Molepolole

DML

Heuningvlei

Omaere

Orapa – 90MWHana

Shakawe

BK11

3

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TRANSMISSION CURRENT GRID OVERVIEW

1. NORTH WEST TRANSMISSION GRID CONNECTION

2. RAKOLA

3. SECOND MORUPULE – ISANG 400 kV LINE 4. ZIZABONA

5. BOSA (BOTSWANA – SOUTH AFRICA) INTERCONNECTOR

6. OTHER GRID REINFORCEMENTS PROJECTS

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Transmission Grid Network Expansion

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1. Botswana national electricity transmission grid does not cover some parts of the country:

a) Pandamatenga – Zimbabwe through a cross border 33 kV line, b) Kasane – Zambia through a cross border 66 kV line, c) Shakawe / Gumare – Namibia through a cross border 33 kV line,d) Ghanzi – Namibia through a cross border 132 kV line,e) Tsabong – South Africa through a cross border 132 kV line,

2. Due to various constraints from these cross-border supplies, additional load can no longer be connected on the above networks

3. F/Town –Maun 132kV line has run out of capacity.4. Suppressed demand from the mining companies5. The NWTGC will connect the areas of North West Region & Chobe District as well as Ghanzi to the

BPC main Transmission Grid6. Provision of power supply to the Zambezi Integrated Agro Commercial Development and the

Water Transfer Scheme project7. Create an alternative path for power trade amongst SAPP (ZIZABONA)8. Financial and Economic benefits to be derived from the project

Transmission Grid Network Expansion1. NORTH WEST TRANSMISSION GRID CONNECTION PROJECT (NWTGC)

Brief background

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GABORONE

Francistown

Maun

Selebi-Phikwe


Z I M B A B W E

N A M I B I A

Matimba P/S

Thamaga

2x21

5km

47km

51km

Tsabong

52km

Morupule A

220kV

400kV

132kV

Phokoje

Orapa Tati30km

Morupule B

Katima

Lobatse

Kasane

Bulawayo

Spitzkop

Jwaneng

33kV

Sowa

Mowana

Pandamatenga

HwangeVictoria

ZAMBIA

To Auas

300km

Kanye

Livingston

Proposed Existing

Molepolole

Heuningvlei

Omaere

Orapa – 90MW

Shakawe

TOTENG

330kV

Gantsi

Gumare

Nata

Watershed

?????

Transmission Grid Network ExpansionNWTGC : Brief background cont…

Lack of transmission

grid access to the North west

NWTGC: Brief Project Background cont…

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Project configuration:Phase 1 : Lots 1 to

Lot 1 - Morupule B to Orapa 400 kV line and Orapa 400/220 kV Substation Lot 2 - Orapa to Maun 400 kV Line and Maun 400/220/132 kV Substation Lot 3 - Maun to Toteng 220 kV line and Toteng 220/132 kV Substation Lot 4 - Toteng to Gantsi 132 kV Line, Gumare 132/33 kV and Shakawe

132kV/33 kV SubstationsPhase 2 : Lots 5 to 7 Lot 5 – 400 kV line from Phokoje to Dukwi, 400/132 kV Substation at Dukwi,

400kV line from Dukwi to Pandamatenga and 400/220kV Substation at Pandamatenga.

Lot 6 - 220 kV line from Pandamatenga to Kazungula, Lesoma and agricultural

development zones and various 220/33 kV substations. Lot 7 – 132 kV line from Dukwi to Mosetse and Nata plus associated 132/33

kV substations.


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NWTGC : PROJECT STATUS

1. Lots 1 -4: Specifications and tender documents is in progress, expected to be complete by November 2015.

2. Lot 5: Inception report is underway

3. Lot 6: Preparation of an inception report is underway

4. Land acquisition is in progress. All substation sites have been allocated (Letlhakane, Mawana, Toteng, Samochima and Gumare

5. ESIA in Progress

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NWTGC : PROJECT TIMELINES

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2013 2014 2015 2016 2017 2018 2019Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Bankable Study, Stakeholder Engagement

Contracting andImplementationJul-2015 to Feb-2016

Procurement of an EPC Contractor, Negotiations and EPC Contract Award, Commencement of Works

Feasibility PhaseUp to Dec-2013

Project PreparationMar-2014 to Dec-2015

Land Acquisition, RFPs Development, Procurement of EC’s, Consultant Appointment , Sites Survey, Geotechnical Studies, ESIA

Sep 2015

Activity

Project ImplementationFeb-2016 to May-2019

Construction, testing, commissioning and Hand-overDefects and Liability Periods start

1. Delay of four months experienced due to delay in acquiring design rights for 400 kV Towers

2. The initial completion date for the Designs and Specifications was June 2015 but has now moved to November 2015

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Transmission Grid Network Expansion2. RAKOLA GRID EXTENSION

Brief background

1. The project consists of a 220/132kV substation in Rakola which is approximately 5 km north of Gabane from A10 road.

2. Segoditshane – Thamaga 220 kV line and the Mogoditshane – Molepolole 132 kV line to be turned into the substation.

3. The substation will be fed by 2 x 220 kV lines from Isang to Rakola which will be constructed under the project.

4. The project will also comprise of a 132/33/11 kV substation in Metsimotlhabe and a 132 kV line from Rakola substation to Metsimotlhabe.

5. The Rakola Grid Extension is aimed at reinforcing the transmission network in the southern region of the country.

6. To improve the reliability and security of the power supply.

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Transmission Grid Network Expansion RAKOLA GRID EXTENSION : Project background cont..

Orapa switchyard

Orapa

Francistown

Serule

Tati

Phokoje

Selebi Phikwe

Matimba P/S Morupule A PS Morupule B PS

Isang Thamaga

Rakola Segoditshane

92km

220kv 400kv

220kv 132kv

223km

76km

51km

30km

80km

102km

215kmkm

215km

86km

80km 47km

18km

34km

10km

Botswana

Metsimotlhabe

South Africa

Existing

Planned

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GABORONE

Francistown

Maun

Selebi-Phikwe


Z I M B A B W E

N A M I B I A

Matimba P/S

Thamaga

2x21

5km

47km

51km

Tsabong

52km

Morupule A

220kV

400kV

132kV

Phokoje

Orapa Tati30km

Morupule B

Katima

Lobatse

Kasane

Bulawayo

Spitzkop

Jwaneng

33kV

Sowa

Mowana

Pandamatenga

HwangeVictoria

ZAMBIA

To Auas

300km

Kanye

Livingston

Proposed Existing

Molepolole

Heuningvlei

Omaere

Orapa – 90MW

Shakawe

TOTENG

330kV

Gantsi

Gumare

Nata

Watershed (RSA)

??


Demand growth outstripping

grid capacity in the

south

RAKOLA GRID EXTENSION : Project background cont..

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RAKOLA: Project Status


1. Construction on the substation has commenced2. Part of the line route has been allocated to BPC and construction

has since commenced.

3. Assessment of affected property is in progress for the remaining portion of the route.

4. Tower testing for 50% of the tower suites has been accomplished.5. Orders for major substation equipment have been placed with the

suppliers.6. The tender documents for another component of the Rakola project

(Metsimotlhabe 132/11 kV substation and 132 kV line from Rakola to Metsimotlhabe) are in progress.

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RAKOLA: Project Timeliness


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1. 400 kV line of approximately 215 km from Morupule power station to Isang substation

2. Line required to integrate Morupule B (5 & 6) to the BPC grid

3. Improvement of security and reliability of power supply

4. Improvement of system stability 5. Improves the potential for trading excess power

3. SECOND MORUPULE – ISANG LINE

Brief background


GABORONE

Francistown

Maun

Selebi-Phikwe


Z I M B A B W E

N A M I B I A

Matimba P/S

Thamaga2x

215k

m47

km

51km

Tsabong

52km

Morupule A

220kV

400kV

132kV

Phokoje

Orapa Tati30km

Morupule B

Katima

Lobatse

Kasane

Bulawayo

Spitzkop

Jwaneng

33kV

Sowa

Mowana

Pandamatenga

HwangeVictoria

ZAMBIA

To Auas

300km

Kanye

Livingston

Proposed Existing

Molepolole

Heuningvlei

Omaere

Orapa – 90MW

Shakawe

TOTENG

330kV

Gantsi

Gumare

Nata

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SECOND MORUPULE – ISANG LINE

Brief background cont..


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1. Inception Report has been approved

2. Designs in progress

3. Survey, ESIA and Geotech are in progress


Project Progress


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2015 2016 2017 2018J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A

Construction, Monitoring,Commissioning, Close-out

Contracting &ImplementationJan-2016 to Mar-2016

Project ImplementationApr-2016 to Apr-2018

Project PlanningUp to Dec-2015

Procurement of Engineering Consultant, Designs and Specification,Preparation of Tender Documents, ESIA Study, Procurement of EPC Contractors

Sep 2015

Signing of contract between BPC and EPCs, Compensation for affected Properties, Acquisition of land for the project

Activity

1. Project is on track2. Construction scheduled to commence in April 2016 and end in

2018


Project Timeliness


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Transmission Grid Network Expansion 4. ZIZABONA

Brief background

1. Development, financing, construction and operation of new high‐voltage transmission facilities in Zimbabwe, Zambia, Botswana and Namibia

2. Strengthen the transmission grid interconnection among the four neighbouring countries

3. Create an alternative wheeling path between north and south

4. De-congest the central transmission corridor

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Transmission Grid Network Expansion ZIZABONA Brief background cont…

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GABORONE

Francistown

Maun

Selebi-Phikwe


Z I M B A B W E

N A M I B I A

Matimba P/S

Thamaga

2x21

5km

47km

51km

Tsabong

52km

Morupule A

220kV

400kV

132kV

Phokoje

Orapa Tati30km

Morupule B

Katima

Lobatse

Kasane

Bulawayo

Spitzkop

Jwaneng

33kV

Sowa

Mowana

Pandamatenga

HwangeVictoria

ZAMBIA

To Auas

300km

Kanye

Livingston

Proposed Existing

Molepolole

Heuningvlei

Omaere

Orapa – 90MW

Shakawe

TOTENG

330kV

Gantsi

Gumare

Nata

Watershed

?????

Transmission Grid Network Expansion ZIZABONA Brief background

cont…Limited

Regional access

Lack of transmission

grid access to the North west

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1. All consultants for technical advisory services (Technical and Transaction Advisor, Project Coordination & Supervision, ESIA for Livingstone-Sesheke line) have been appointed 2. An 80 MW PPA between ZESA and NamPower was signed on 16th October 2014 with a tenure of 15 years.

3.The PPA between NamPower and CEC for 200 MW is still being pursued and to date the parties have signed a term sheet.

4.Market study currently being reviewed

4. Lawyers Committee to meet and prepare the SHA for signing.

5. The signing of the SHA would facilitate for the establishment of the SPV to run the ZIZABONA project

ZIZABONA: Project Status


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Transmission Grid Network Expansion ZIZABONA :PROJECT TIMELINES

Item No. Item Description Timelines1 Financial Close March 20162 Project Phase 1 Construction 2016 to 20173 Phase 1 COD Jan 2018

1. At present it is very difficult to have a workable program in place due to:i. Critical project enablers are still in progress (PPAs and SHA)ii. Financial review based on the phased out approach is in progress

2. Timelines for critical milestones are as follows:

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1. Transmission Line from Isang to Watershed (voltage to be decided)

2. Enhance electricity trading between South Africa and Botswana as well as other SAPP members

3. Improvement of security and reliability of power supply

4. Improvement of system stability

5. Botswana – RSA Interconnector (BOSA)

Brief background


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GABORONE

Francistown

Maun

Selebi-Phikwe


Z I M B A B W E

N A M I B I A

Matimba P/S

Thamaga

2x21

5km

47km

51km

Tsabong

52km

Morupule A

220kV

400kV

132kV

Phokoje

Orapa Tati30km

Morupule B

Katima

Lobatse

Kasane

Bulawayo

Spitzkop

Jwaneng

33kV

Sowa

Mowana

Pandamatenga

HwangeVictoria

ZAMBIA

To Auas

300km

Kanye

Livingston

Proposed Existing

Molepolole

Heuningvlei

Omaere

Orapa – 90MW

Shakawe

TOTENG

330kV

Gantsi

Gumare

Nata

Watershed (RSA)

??

BOSA : project background cont..


Demand growth outstripping

grid capacity in the

south

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BOSA : Project Status


1. The two utilities have assembled a team to undertake the necessary project activities

2. SAPP have been engaged to assist with project coordination

3. DBSA have availed funding for the bankable feasibility study (BFS)

4. The Steering Committee Terms of Reference and the Non-Disclosure Agreement have been signed.

5. The Inter-Utility Memorandum of Understanding (IUMOU) is underway,

6. RFP for Procurement of consultancy services for the BFS is in floatation and will close on 13/11/2015

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Transmission Grid Network Expansion BOSA :PROJECT TIMELINES

2015 2017 2018 2019 2020 2021Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Activity

Signing of contract between BPC and EPCs,Compensation for affected Properties, Acquisition of land for the project

Sep 2015

IGMOU and IUMO, Power System Studies, Procurement of Engineering Consultant,Designs and Specification, Preparation of Tender Documents, ESIA study, Procurement of EPC contractors

Construction, Monitoring,Commissioning, Close-out

Project ImplementationApr-2018 to Apr-2021

Contracting &ImplementationJan-2018 to Mar-2018

Project PlanningUp to Dec-2017

Transmission Grid Expansion Plan

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6. OTHER INTERNAL NETWORK REINFORCEMENTS

PROJECT TIMING BENEFITRamotswa 132/11kV S/S & lines 2015 - 2017 Secure and Power Supply Quality

Mochudi 132/33kV S/S & lines 2015 - 2017 Secure and Power Supply Quality

Tlokweng 132/11kV S/S & lines 2015 - 2017 Secure and Power Supply Quality

Phakalane capacity increase 2015 - 2017 Secure and Power Supply Quality

Capacitor Banks for Gab South 2015 - 2016 Secure and Power Supply Quality

Gaborone East capacity increase 2014 - 2016 Secure and Power Supply Quality

Supply to Moralane pumping station 2014 - 2016 CFP- Water pumping

Supply to Masama/Makhujwane 2015 - 2017 CFP- Water pumping

Capacitor Banks for Maun substation 2015 - 2016 Increase power transfer

Orapa capacity increase 2014-2016 CFP- Secure and Power supply Quality

SCADA Upgrade and Control Area Establishment 2016- 17 Secure and Power Supply Quality

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# RISK POSSIBLE CAUSES POSSIBLE CONSEQUENCES

MITIGATION MEASURES

RISK OWNER

1 Failure to attain project viability

• Failure to execute required PPAs

• Project will fail to take off

• Reputation damage

• Financial Loss

Other project anchors should be explored

SAPP CC & Members

2 Project Delays

• Delayed Equity contribution

• Delayed execution of the SHA

• Delayed establishment of the SPV

• Financial loss

• Delayed Financial close

• Failure to meet strategic priorities

Members to be urged to contribute well ahead of target date for financial close

SAPP CC

PROJECT RISKSRisks related to ZIZABONA project

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# RISK DESCRIPTION

POSSIBLE CAUSES POSSIBLE CONSEQUENCES

MITIGATION MEASURES

RISK OWNER

1 Project Delays

• Delay in acquiring the land for the project

• Delay in accomplishing the EIA

• Increased water shortage in the south

• Reputation damage

• Failure to meet strategic priorities

• Continuous tracking of process

• Continuous engagement of stakeholders

DirectorsManagers

Risks related to other projects

PROJECT RISKS cont…

THANK YOU

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