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Kibo and SEPCO III sign EPC contract

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World Coal,

AIM-listed Kibo Mining has awarded the EPC contract for the construction of the power plant element of the Mbeya coal-to-power project (MCPP) to Chinese contractor, SEPCO III. Located in Tanzania, the MCPP includes a 250 – 350 MW mine mouth power plant.

The companies signed a legally-binding EPC Cover Agreement on 19 December, Kibo said in a recent press release. The Cover Agreement incorporates the EPC contract, as well as the EPC co-ordination agreement, which governs the implementation and execution of the EPC contract, as well as the OEM contract submitted by GE. The OEM contract forms an integral part of the EPC contract.

“Signing the EPC Cover Agreement is the most decisive step forward to date in the development of the MCPP,” said Kibo’s CEO, Louis Coetzee. “With certainty on the EPC price now, we can confidently state that the MCPP is not only definitely viable, but also very robust.”

The EPC contract remains subject to potential change, pending final agreement of the Power Purchase Agreement and requirements by lenders and equity investors during financial close. The EPC contract price is fixed, however, by the Cover Agreement.

“The final EPC price will now allow us to finalise the integrated financial model for the MCPP, but more importantly to finalise PPA negotiations expeditiously, as soon as the Tanzanian government has concluded its final policy changes on the procurement of power projects like the MCPP,” continued Coetzee.

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