Aim-listed Ncondezi Energy has submitted an updated tariff proposal to Mozambican State-owned power utility Electricidade de Moçambique (EDM) and the Ministry of Mineral Resources and Energy (Mireme).
The updated tariff proposal arose from a financial model submitted to the two authorities, which confirmed the project economics. The project economics can be maintained with a more than 10% reduction on the previously agreed tariff envelope.
The submission of the tariff proposal forms part of the process to receive formal support from EDM and Mireme to progress the coal mine 300 MW power plant project, in Tete, Mozambique, and is a key milestone in finalising the joint development agreement between the stakeholders.
Ncondezi is now targeting the completion of a joint development agreement within three months, as soon as EDM and Mireme approve the tariff proposal. EDM has requested a detailed workshop to be held with all the strategic partners to work through the proposal and agree on the next steps.
The workshop is tentatively planned for early August.
Additionally, the workshop will discuss power purchase agreement negotiations, financial close and the date on which first power on the national electricity grid is expected.
Ncondezi nonexecutive chairperson Michael Haworth said in a statement that EDM has indicated the need for a 300 MW coal-fired project on its grid by 2023 in its ten-year strategy paper – published earlier this year – to fill a critical power shortfall and energy mix need in the north of the country.
“We believe that the project is well positioned to deliver on this as one of the most advanced power development projects in Mozambique, together with world-class potential strategic partners.”