Botswana Oil aims to secure future energy needs through PPPs

The Tshele Hills project is a critical part of increasing Botswana’s fuel storage capacity and intends to address the Government’s objective of achieving 60 days of petroleum products consumption as strategic stocks by the year 2030.

The project is currently in the Public Private Partnership (PPP) Procurement phase where BOL is procuring a suitable private partner to develop and operate the facility as a public asset. The project is expected to appoint a private partner and reach financial close by May 2025 before it could proceed to Construction phase. 

Construction of the Tshele Hills storage facility is expected to commence in 2025 and complete in 2027.  Upon completion of construction, the Private Party will then operate the 187 million litres facility for a period of a minimum of 20 years after which it will be transferred to the Government.

By entering a PPP, the delivery of a public service infrastructure is enhanced by accessing the private sector’s financial, managerial, professional, and technical expertise.

The necessary maintenance and operation of this infrastructure is also enhanced by private sector resources. This allows public services to be delivered more efficiently, which allows Government resources to be channelled into other areas where direct public investment and intervention is required.

“Advantages of this approach is funding availability which may not necessarily be available through Government treasury. The other advantage is the experience, expertise and financing and increased risk transfer to the Private Partner,” said Botswana Oil General Manager—Operations Otto Keitumetse.

“The same private entity will be responsible for both the construction and operation activities and will therefore be less willing to underinvest in the construction phase, since they will benefit from this investment in the future, expressly during the operation phase.”

According to Keitumetse, the selection of the Private Partner also ensures that partners have sufficient funds and the necessary experience to design, develop and operate the facility.

The PPP model will avail funding and expertise to construct Tshele Hills storage facility that will ensure a supply envelope that will cover 68% of the national consumption.

Botswana Oil has engaged a Transactional Advisor who is responsible for structuring the project as a PPP, making it attractive for private sector participation in line with the PPP Policy and Implementation Framework of 2009.

The RFQ was issued to the market in September 2022 and completed in May 2023. Currently an RFP has been developed and is ready to go out to the market before end of the year 2023.

A dedicated Project Management Team has been appointed to run the day-to-day management of the project including optimizing the schedule to accelerate delivery of the project. This team includes a Project Manager, Planners, Project Controllers, and the Transaction Advisor’s Project team who are all responsible for monitoring and controlling progress.

In addition to Tshele Hills, there are other security of supply projects mentioned, such as the Francistown expansion and Ghanzi Fuel Depot. The Francistown Depot Expansion Project commenced with phase one in September 2022, which will be completed in January 2024, availing a road loading/offloading gantry.

Phase 2 which includes tank construction is currently in procurement and construction is scheduled to start in January 2024 with completion in December 2024.

The Ghanzi Fuel Depot project designs have been completed and we are currently in procurement of contractors to start the works. Award of the Civils & Building contract package is expected this month, with a groundbreaking ceremony by end of November 2023.

The project is expected to be completed by December 2024. Through collaborations with stakeholders in both public and private sectors, Botswana Oil is well positioned to successfully deliver on the various projects to achieve its mandate.  

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