AUSTRALIAN junior Coal Bed Methane (CBM) developer Tlou Energy Limited has signed an interim Power Purchase Agreement (PPA) with Botswana Power Corporation (BPC).

The 2MW CBM Pilot PPA is now undergoing final regulatory formalities.

Managing Director, Anthony Gilby, said the PPA is a major step forward for Tlou and the company.

Mr Gilby said the company remains in discussions with potential project finance partners who have been waiting to see the interim PPA in place, which facilitates connection to the power grid and first revenue for the company.

He said a pathway to revenue generation is key for financiers and once connected to the grid, expansion of the project (and thereby increasing revenue) is seen as a relatively straightforward and largely de‐risked process.

The company submitted a proposal to Botswana’s Ministry of Mineral Resources Green Technology and Energy Security (MMGE) in 2018 for the development of a 10MW CBM Gas‐to‐Power plant.

The 10MW proposal is separate to the 2MW interim PPA announced today. BPC and MMGE continue to assess the 10MW proposal and will advise the company in due course.