State oil company Botswana Oil is planning to build a new coal-to-liquids plant, with an investment of $2.5bn, in a bid to reduce its dependence on imported fuel, reported Reuters.

Planned to be operated under a public-private partnership model, the coal-to-liquids plant is expected to have a production capacity of 12,000 barrels of diesel and gasoline a day.

The new facility is estimated to have an operational life of 30 years.

The diamond-rich Southern African country currently imports all its liquid fuels, which is approximately 21,000 barrels a day, through South Africa.

As a result, the land-locked country often faces fuel shortages when South Africa faces logistical challenges.

Botswana Oil senior manager responsible for new ventures Gamu Mpofu was cited by the news agency as saying: “The project has been approved for procurement and production will primarily be for the local market.”

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By GlobalData

Botswana is estimated to hold nearly 212 billion tonnes of coal resources. Despite this, it imports nearly 7.5 million barrels per year to meet its fuel needs.

In spite of the environmental concerns being raised against coal production across the globe, Botswana is looking to exploit its coal reserves to develop its economy.

Mpofu added: “There is a case for using coal to produce fuel for Botswana and it will be done within the environmental considerations that the country has signed up to with various stakeholders.”