Botswana has initiated a rail and port project aimed at facilitating coal exports through Mozambique.
In a significant move to leverage its extensive coal reserves, Botswana, along with Mozambique, and Zimbabwe, has initiated a rail and port project aimed at facilitating coal exports through Mozambique. This ambitious project, while promising substantial economic benefits, still faces financial and logistical challenges.
Strategic Partnership for Economic Growth
A tripartite agreement involving Botswana, Mozambique, and Zimbabwe has been signed to advance the development of a comprehensive rail and port network. The African Development Bank (AfDB) has pledged $4 million for a feasibility study to evaluate the project’s viability. Mozambique’s Minister of Transport and Communications, Mateus Magala, announced this development during a televised ceremony, highlighting the regional cooperation at play.
Infrastructure Enhancements and New Developments
The project entails upgrading existing rail infrastructure across Botswana, Zimbabwe, and Mozambique, in addition to constructing new rail links. A key component of this initiative is the development of a new deep-water port south of Maputo, Mozambique’s capital. This port, to be located near a national park teeming with wildlife such as elephants and cheetahs, is crucial for enabling Botswana to access international markets.
Addressing the Stranded Asset Challenge
Botswana is home to an estimated 212 billion tons of coal reserves, as reported by the World Energy Council. The country is racing against time to export its coal before global shifts towards renewable energy potentially leave these resources stranded. The planned port at Techobanine, with an estimated cost of $1.5 billion based on 2018 figures, is envisioned to not only serve Botswana but also facilitate coal exports from South Africa and Eswatini, along with other commodities.
Overcoming Financial and Environmental Hurdles
Despite the project’s promising outlook, significant obstacles remain. Securing financing for coal-related infrastructure has become increasingly difficult as financial institutions distance themselves from the most polluting fossil fuel. The proposed 1,700-kilometer (1,060-mile) rail link has been discussed for decades without substantial progress due to these financial constraints.
A similar scenario unfolded in Mozambique, where Ncondezi Energy Ltd. had planned a 300-megawatt coal power plant, partnering with China Machinery Engineering Corp. in hopes of securing Chinese funding. However, in a significant policy shift, Chinese President Xi Jinping announced in September 2021 that China would cease financing foreign coal projects. This decision led Ncondezi to abandon its coal ambitions and rebrand as a solar power company, now known as Solgenics Ltd.
Botswana’s endeavor to establish a new export route for its coal reserves underscores the nation’s strategic efforts to capitalize on its natural resources amidst a transitioning global energy landscape. While the project holds potential for regional economic enhancement, the pursuit of funding and adherence to environmental considerations remain critical challenges. The outcome of the African Development Bank’s feasibility study will be pivotal in determining the project’s future trajectory and its impact on southern Africa’s economic integration and growth.
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