GABORONE, June 9 (Reuters) - Botswana has scrapped talks to sell a power station plagued by technical problems to a state-owned Chinese company linked to the plant’s builder, an official document seen by Reuters showed.
The 600-megawatt coal-fired Morupule B plant, which was commissioned in 2012 and built by China National Electric Equipment Corporation (CNEEC) at a cost of $970 million, has often broken down, leading to a reliance on diesel generators and imports from South Africa.
Botswana has been in exclusive negotiations since November 2016 to sell the plant to state-owned China Machinery Engineering Corporation (CMEC), which is related to CNEEC.
In a notice seen by Reuters on Friday, the African country’s Public Procurement and Asset Disposal Board (PPADB) said it had approved a request from the Ministry of Energy to cancel the sale tender.
“The board has approved the request for authority to cancel the tender for divestment of government of Botswana and Botswana Power Corporation (BPC) financial interest in Morupule B,” read the notice.
Government officials were not immediately available to comment.
Power generation at Morupule B has improved in the last year due to remedial works and it currently operates at about 81 percent capacity, helping the power utility reduce imports.
Botswana has a maximum electricity demand of 520 MW, which is seen rising by 65 percent in the next seven years to 856 MW in 2025.
Cancellation of the Morupule B tender comes after a planned $800 million expansion of the coal-fired power plant by Japan’s Marubeni Corp and South Korea’s Posco Energy stalled due to a disagreement over terms. (Writing by James Macharia Editing by Helen Popper)