CIC Energy Corp. is developing the Mmamabula Energy Complex in Botswana, Africa. This planned Complex consists of the Mmamabula Energy Project (MEP), the Coal-to-Hydrocarbons Project and the Export Coal Project.
The MEP is a planned greenfield power station and integrated coal mine being developed in partnership with International Power plc.
Botswana has been a stable democracy for over the last 40 years and has an A2 credit rating from Moody’s.
The MEP is currently the largest private sector infrastructure project in Africa.
CIC Energy is listed on the Toronto Stock Exchange under the symbol ELC and on the Botswana Stock Exchange under CIC Energy.
Southern Africa is projected to require significant new baseload power generation capacity over the next several years. The major offtaker of the power generated by the Mmamabula Energy Project is envisaged to be Eskom Holding Limited, South Africa’s national electrical utility while Botswana Power Corporation is expected to take the balance. The MEP site is approximately 50 km from the South African border. CIC Energy signed a Memorandum of Understanding with Eskom in May 2006 and is now in negotiations to conclude a Power Purchase Agreement which is expected to be for a term of approximately 40 years.
In October 2006, CIC Energy announced the selection of International Power plc ("IPR") as development partner for the Phase One of the MEP. London Stock Exchange-listed IPR is one of the world’s leading independent power producers with a wealth of experience in the development and operation of large-scale power stations globally. IPR has a total installed capacity in excess of 18,900 MW (net) in 20 countries worldwide. IPR indirectly owns a 50% interest in the MEP.
CIC Energy’s exploration activity at Mmamabula is nearly completed. In June 2007, the independent NI 43-101 global mineral resource estimate for the Company’s Mmamabula Coal Field totalled 2.3 billion tonnes of coal in the measured and indicated categories, as filed on SEDAR (www.sedar.com). An updated NI 43-101 resource estimate is anticipated in mid-2008.
A Bankable Feasibility Study by a group of internationally recognized independent consulting groups is well underway and is expected to be completed in 2008. The Company estimates that the total cost of development and construction of the first phase of the power plant and coal mine to be in excess of US$9.5 billion.
The Company plans to develop the power station at Mmamabula in two equal phases of three units each, which together will provide a total capacity of 4,200 to 5,000 MW supported by an approximately 15 to 18 Mt per annum coal mine. To put the scale of the MEP in perspective, this is equivalent to 12 to 14 percent of Eskom’s current capacity and approximately ten times Botswana’s current electrical usage.
CIC Energy’s intention is to advance development of the MEP with the objective of commencing construction in 2008 and commercial power production in late 2012 or early 2013 to address the urgent demand in southern Africa for new sources of baseload power.
The Company is currently in discussions with a select group of Engineering, Procurement and Construction (EPC) contractors for the construction on a lump sum turnkey basis, of the power plant and related infrastructure following the launch of a formal EPC tender in December 2006.
CIC Energy has also signed Memorandum of Understanding (MoU) with the Government of Botswana. Also related to the MEP, the Government of Botswana and Government of South Africa have signed a MoU. In addition, Eskom has signed a MoU with the Botswana Power Corporation related to transmission integration and other matters related to this Project.
The MEP will meet World Bank social and environmental standards for a coal-fuelled power station.
