Dual-listed Kibo Mining expects its Mbeya coal-to-power (MCPP) project, in Tanzania, to produce electricity at “well below” national electricity tariffs.
“Tanzania has varied electricity tariffs; it can be anything from $0.18/kWh to $0.35/kWh, but our project will come in well below the existing going rate,” CEO Louis Coetzee told Mining Weekly.
He pointed out that Kibo was in negotiations with power utility Tanzania Electric Supply Company, as well as other potential private offtakers, regarding the conclusion of power purchase agreements.
Coetzee said there was also potential, in future, to export power to neighbouring countries, but, in the short term, any electricity generated by the MCPP project would be used to satisfy Tanzania’s electricity demand.
Meanwhile, he described the African country’s approach to independent power producers as “very progressive”.
“It is a very competent, very progressive environment that is well aligned with what you see internationally and it is quite an easy environment to work in,” he commented.
A definitive feasibility study on the MCPP project would be completed in October.
Coetzee said Kibo would appoint contractors to build and operate the MCPP project only once the company had started the process of securing funding for the construction of the project.
Kibo would strive to make use of as many suppliers from Tanzania and Southern African Development Community countries as possible.
The company was expecting to fund the project on a 75:25 debt-to-equity ratio and was working closely with its financial advisers, including Standard Bank, in preparation for the process of securing financing.