Out-Law News 1 min. read
29 Aug 2017, 4:40 pm
The company said its objective is to identify a new partner "capable of providing a leadership role in the financing, construction and operation of the power plant, with a credible track record in both the global and African power sectors".
Ncondezi said it has already started to receive "non-binding offers from potential partners" (389 KB / 2-page PDF), which it plans to narrow down to a few preferred partners who will go forward to complete due diligence and submit binding offers. The successful partner is due to be selected by the end of this year.
Non-executive chairman Michael Haworth said the project "is one of the most advanced development stage coal-fired power projects in the region and remains an attractive opportunity to international developers and operators".
"We are very pleased with the quality of the partners who have submitted offers to date, and believe the power project will be well positioned to finalise development [and] financing and initiate construction once a binding offer has been agreed," Haworth said.
Meanwhile, Ncondezi said it has received in-principle support from loan holders to extend an existing loan for a further 12 months to September 2018. The company said the extension "reflects the progress that has been made since June 2017, and will provide more time to explore refinancing opportunities in parallel with further project de-risking".
Ncondezi owns 100% of the Ncondezi Project, which is in the "power generating hub of the country", in northern Mozambique, it said.
In addition to the power plant, which is being developed in phases of 300MW up to 1,800MW, the company is developing an integrated thermal coal mine.
The overall cost of the power plant project is estimated at between $500 million and $600 million. The first 300MW phase is targeting domestic consumption in Mozambique using reinforced existing transmission capacity to meet current demand.
Ncondezi said the power project is "closely aligned" to efforts by Mozambique's government to accelerate the country's electrification. Mozambique is the largest exporter of power to South Africa and yet only 20% of the country is currently electrified.
The Ncondezi coal deposit has a 4.7 billion JORC (Joint Ore Reserves Committee code) coal resource that is "capable of supporting a large scale, long life operation", the company said.
According to a World Bank report released earlier this year, extractive industries in Mozambique kept up double-digit output growth in 2016 thanks to "sizeable foreign direct investment (FDI) inflows and recovering commodity prices".
The bank's biannual 'Mozambique Economic Update' report said (40-page / 3.98 MB PDF) support for the oil, gas and mining industries was "a welcome trend, given the importance of this sector for crowding in investment and creating jobs".
