Ncondezi Energy Limited has provided an update in relation to its 300MW power plant project located near Tete in northern Mozambique.
Extension of Commercial Deal with EdM
On 15 December 2014 the company announced that it was in the process of seeking an extension from Electricity de Mozambique (EdM) to the period in which certain conditions precedent that relate to the conditional commercial deal signed between the parties in September 2014 are required to be satisfied. EdM has formally agreed to extend the deadline for the conditions precedent.
The agreed commercial deal includes the range for the starting electricity tariff to be paid by EdM, which will then be subject to adjustments during the 25 year operational life of the project. The starting tariff range is based on a number of assumptions including indexation, financing costs, coal costs, operator & maintenance costs and the technical parameters and capital costs contained in the binding Power Plant EPC bids. Based on a target project capital structure of 70% debt and 30% equity, the company believes that the conditional commercial deal supports the economics of the Ncondezi Power Plant and provides a regionally competitive US$ based project equity IRR.
Transmission Line ESIA Approval
During March 2015, the company received official notification from the Ministry for Coordination of Environmental Action regarding the approval of the Environmental Social Impact Assessment for the 92km transmission line that will connect the project to the Mozambican national grid. This follows ESIA approvals that have already been granted on both the mine and power plant.
Current Cash Position
Following a detailed review of the company’s budget and the implementation of cost saving initiatives, management are comfortable that the company has sufficient cash to support ongoing operations until Q1 2016.
Appointment of Chris Schutte as Chief Operating Officer
The company is pleased to announce that Mr Chris Schutte has agreed to become the Chief Operating Officer of Ncondezi and will now sit on the Board as an Executive Director. Mr Schutte was appointed a Non-Executive Director of Ncondezi in February 2013 and led the company’s power plant EPC selection and binding bid process during 2014. Mr Schutte has worked in the power sector for more than 20 years and was previously Senior General Manager of the Group Technology Division and responsible for all the engineering functions at Eskom, including design accountability for new power stations, transmission lines and distribution development. Prior to this, he was Senior General Manger of Eskom’s Generation Division, managing five power stations with over 18 000MW total installed capacity. He holds a degree in mechanical engineering.
Adapted from press release by Joseph Green
Read the article online at: https://www.worldcoal.com/power/31032015/ncondezi-project-update-commercial-edm-2132/