November 5, 2016 / 11:51 AM / in a year

Botswana to sell struggling Chinese-built power plant

GABORONE (Reuters) - Botswana will sell a 600 megawatt Chinese-built power plant after persistent technical problems since it was commissioned in 2012, the country’s state electricity firm said on Saturday.

Botswana’s Morupule B coal-fired power station, built by the China National Electric Equipment Corporation at a cost of $970 million, has often broken down, leading to a reliance on diesel generators and imports from South Africa.

“Morupule B has proven to be costly to maintain and operate due to construction defects rendering the plant unreliable,” Botswana Power Corporation (BPC) chief Stefan Schwarzfischer said in an notice to staff.

The sale would take 6 to 12 months, he added.

A joint venture between Japan’s Marubeni Corp and South Korea’s Posco Energy [POSCOP.UL] won an $800 million tender in March to expand the Morupule B plant by 300 MW.

BPC has been running at a loss for eight years and is implementing a turnaround strategy after posting a 1.9 billion pula ($180 million) operating loss in the 2015/16 financial year. It also received 2.3 billion in government subsidies.

Writing by Joe Brock; Editing by Alexander Smith

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