TLOU Energy Ltd (LON:TLOU) revealed that Botswana's Department of Environmental Affairs has approved the company’s environmental impact statement (EIS) for its planned coal bed methane project.
The EIS was for a 20 megawatt coal bed methane fuelled power generation plant, plus a 66kV Transmission Line to Serowe and a solar farm with a capacity of up to 20 megawatts.
The approval was described as a “major achievement” as it represents the final environmental authorisation needed to advance the Lesedi project through to commercialisation. The approval remains valid for 30 years.
The company said the approval would allow it the flexibility to rapidly expand to 20MW of CBM generation, with the added renewable capacity from the solar farm.
TLOU chief executive Tony Gilby said the approval further de-risks the Lesedi project.
“The granting of the downstream EIS is great news for the company as it gives the final environmental authorisation for the initial proposed development of up to 10MW of power generation and allows for a further 10MW of CBM power generation. This gives the company the option to rapidly expand to 20MW,” he added.
In afternoon trading, shares in TLOU were 9.5% higher at 7.45p.
In a note to clients, analysts at ‘house’ broker Shore capital said: “We agree that downstream EIS approval is excellent news for Tlou, as it gives final environmental authorisation for the initial proposed development of up to 10MW, whilst providing the option to rapidly expand to 20MW.
“With an active work programme underway and strong progress being made at Lesedi, we continue to see excellent scope for Tlou to become a leading Southern African-focused independent power producer.”
They added: “We see some very exciting potential catalysts on the horizon in the near term, particularly with regard to a definitive result from the current RFP tender process and the announcement of initial production test results from the ‘Lesedi 3’ and ‘Lesedi 4’ wells.”
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