Coal-Fired Plant in Botswana

Delphos International advised the Government of Botswana and Botswana Power Corporation ("BPC") on the financing of the 600 MW Morupule B coal-fired power project, including associated transmission and water supply infrastructure, with total project costs estimated at $1.6 billion. As sole financial advisor, Delphos International designed and organized a process for soliciting financing proposals from domestic, regional, and international financing institutions. Following receipt of more than 10 expressions of interest, the team analyzed and ranked the submissions, and based on our recommendations the client chose a financing plan involving a mixture of multilateral and commercial financing at very attractive rates and tenors. ICBC (China) provided $825 million over a 20-year term, backed by a Sinosure guarantee for the first 15 years and a partial credit guarantee from The International Bank for Reconstruction and Development ("IBRD") for the last 5 years. ICBC also provided a bridge loan facility of $140 million, guaranteed by its affiliate Standard Bank of South Africa, to help BPC meet EPC contract milestone payments while final approvals were being arranged for the term loan facility.

Along with Standard Bank, Delphos International also designed a hedging solution that converts the proceeds of the dollar financing into actual and synthetic Pula (based on a trade-weighted currency basket). Financial close on the ICBC facilities took place according to schedule on June 15, 2009. In addition, Delphos International advised BPC on the negotiations of a bankable coal supply agreement between MCL (a subsidiary of DeBeers) and BPC for the Morupule project. The transaction was awarded the 2009 Deal of the Year by Project Finance and Project Finance International magazines.

Project Details

Client Name: 
Botswana Power Corporation - Morupule B

Location Region: 
Southern Africa

Services Provided: 
Advisory Services & Business Development