Name and Location
Mookane domestic power project (MDPP), Botswana.

Project Description
The project proposes to build a 300-MW (gross) coal-fired baseload power station and associated coal mine at CIC Energy's Mmamabula coalfield, in south-eastern Botswana. The MDPP is expected to be the first baseload independent power producer project to break ground in the country, and will draw its primary energy from the western block, as opposed to the central block of the Mmamabula coalfield, which is set to feed the 1 320-MW Mmamabula energy project (MEP), should it proceed.

The project will be developed independently of the MEP. The power station will be on a site located adjacent to, but physically separate from, the site planned for the MEP's power station. The associated 1,3-million-ton-a-year coal mine will be developed on a separate portion of the coalfield.

The plant will employ circulating fluidised-bed boilers, which, together with a proposed washing plant, will significantly reduce sulphur emissions.

The entire initial capacity will be sold to the Botswana Power Corporation (BPC); however, future sales across the border will be possible should the unit be expanded to 450 MW.

Value
The cost of the MDDP's capital equipment and infrastructure is estimated at $800-million. The project will be financed at a ratio of not less than 70% debt, with the remaining 30% contributed by the equity partners. Most of the debt funding is being lobbied from Chinese financial institutions. The debt is expected to be nonrecourse to CIC Energy.

Duration
It is expected that the MDDP will be completed 26 months subsequent to the start of full construction activities, preceded by another four months of site preparation works. The power station will be able to deliver electricity for commercial sale by mid-2013.

Client
GLC-CIC Mookane Power Holdings, under the terms of the shareholders' agreement. CIC Energy will have a 30% equity stake in the holding company, while GCL Botswana will own the remaining 70% equity stake in the MDPP.

Key Contracts and Suppliers
None stated.

Latest Developments
CIC Energy has signed a shareholders' agreement for the MDDP. The construction and operation of the MDDP power plant and the associated coal mine and project infrastructure will be handled by affiliates of GCL. CIC Energy will be paid a development fee by the affiliates of GCL, and will also be reimbursed for all historical costs pertaining to the MDDP. In addition, the company will transfer around 200-million tons of coal resources to the project company for the construction of the coal mine for the MDDP.

Since the signing of the memorandum of understanding in March 2010, a considerable amount of work on the MDDP has been completed. This includes completion of much of the technical support for the power plant, including the completion of the basic engineering design and integration into the BPC transmission grid; the plan for the MDDP coal mine, with initial projections to produce 1,3-million tons a year, and a technical solution for a coal beneficiation process to ensure compliance with international environment emissions standards; project costs and financial models; the agreement on a fixed, lump-sum price for the engineering, procurement and construction (EPC) contract for the power station, mine and associated infrastructure; and the start of term sheet negotiations with lending banks for the project's debt financing.

The next steps in the development of the MDDP planned for 2010 and early 2011 include the submission of a 30-year tariff offer, along with a proposed power purchase agreement (PPA) offer to BPC; the start of negotiations with the government of Botswana, regarding project aspects, such as investment protection and stabilisation, taxation, human resources, land rights and management of the environmental-impact assessment (EIA); and the submission of applications for the mining and power generating licences to the government.

The developers of the MDDP plan to submit the relevant EIAs and construction permits to government; conclude negotiations and the signing of the EPC contract as well as the signing of the PPA, the EPC contract and the PPA, with the government of Botswana, by the end of the fourth quarter of 2010.

CIC Energy also expects to receive both the mining and power generating licences, including construction permits and the approval of the EIAs, by the end of the first quarter of 2011. This will be followed by the purchase of equipment, site access and preparation and provision of construction facilities.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
CIC Energy Botswana, tel +267 391 1982 or fax +267 391 1986.
Tau Capital Corporation investor relations vice-president Erica Belling, tel +1 416 361 9636 or
email ebelling@taucapital.com.