The joint development agreement (JDA) for Aim-listed Ncondezi Energy’s integrated 300 MW power and coal mine project in Tete, Mozambique, is nearing completion.
The company on Monday reported that its integrated financial model (FM) has been accepted by potential partners and company stakeholders for submission to Mozambican energy company Electricidade de Moçambique and Mozambique’s Mineral Resources and Energy Ministry.
This submission is targeted for mid-June to seek in-principle support for a new power tariff envelope thereafter.
The FM represents a key milestone in confirming the project economics, restarting tariff negotiations and completing the JDA process, said Ncondezi.
“Positive results from the FM indicate that project economics can be maintained with more than 10% reduction in the previously agreed tariff envelope.”
“A reversed tariff proposal strengthens the commercial negotiating position of the project,” the company stated.
The FM finds the project could have financial benefits for Mozambique including between $1.1-billion and $1.4-billion in tax receipts and royalties over the life of the project.
The coal-fired project is expected to start delivering power into the grid in 2022.