Marking a significant step towards its vision of developing renewable energy projects that are complementary to gas, Botala Energy Ltd (ASX:BTE) has entered a strategic partnership and binding heads of agreement with AAAS Energy BV, a renowned developer of solar photovoltaic parks in Sub-Saharan Africa.
This strategic partnership is focused on the development of 200-250MW of solar photovoltaic (PV) capacity at Botala’s Leupane Energy Hub and Industrial Park in Botswana. It presents an attractive way for Botala to potentially unlock significant value from the project without incurring initial development costs and leveraging the solar expertise of AAAS.
Under the agreement, AAAS will farm-into 50% of the project for A$1,000,000. AAAS will be responsible for all initial development capital to take the project to bankable feasibility study.
Botala has no funding commitment until the A$1,000,000 is spent by AAAS, with any additional contributions to be equally shared. The company doesn’t expect to have any funding requirement within the next twelve months.
Both parties will finalise a BFS by the end of 2024, which will determine the project cost, and ownership and funding structures for a final investment decision (FID).
Initially, the project special purpose vehicle (SPV) will be 50% owned by each Botala and AAAS, with equity contributions based on contributions to project development costs and land access rights.
Following AAAS’s A$1 million farm-in, anticipated by end of Q1/2025, any additional costs will be shared equally, with dilution applicable for non-contributing parties.
Based on the outcome of the BFS and FID, both parties have committed to negotiate further solar capacity development under similar terms.
The decision to proceed with the joint development agreement subject to review of the bankable feasibly study will be at the sole discretion of Botala.
“An attractive way to advance a significant opportunity”
Botala CEO Kris Martinick said: “We are excited to now be able to attract significant partners into our projects to take them from the conceptual phase and further develop them into potential operating assets.
“The strategic partnership with AAAS provides an attractive way to advance a significant opportunity at Botala’s Leupane Energy Hub and Industrial Park without incurring initial project development costs.
“We look forward to working closely with AAAS and leveraging their extensive experience in solar project development.”
Bankable feasibility study underway
Botala will review the bankable feasibility study outcomes by the end of CY2024 to decide whether to proceed with the joint development agreement.
A portion of the BFS will be focused on a final market assessment and development of potential off-takers in the Southern African region.
The BFS will assess the potential for developing the project as a merchant power station, this effectively means trading power via the Southern African Power Pool market and the wheeling of power to third parties in the SADC region under longer term off take agreements.