JOHANNESBURG (miningweekly.com) – Further advancing its 300 MW integrated thermal coal mine and power plant project, in northern Mozambique, Aim-listed Ncondezi Energy has signed Power Plant Project Vehicle Ownership Binding Heads of Terms (PPPV HoTs) with the Mozambique government.

In addition to Ncondezi's transferrable equity in the PPPV, a key principle of the PPPV’s ownership structure would grant the State's nominated investor, expected to be Electricidade de Moçambique (EDM), a base participation of 5% in the share capital of the PPPV that would be funded through a financing mechanism to be agreed with Ncondezi.

EDM would also have an option to acquire an additional 10% equity in the PPPV, on commercial terms, exercisable up to financial close of the power plant.

In addition, Mozambican citizens would, as envisaged under applicable mega projects legislation, be given the opportunity to take up a minimum of 5% equity in the PPPV at commercial market terms, within five years of project commissioning, while foreign strategic investors will be allowed to participate in the PPPV on commercial terms.

“It is the intention that the equity in the PPPV will be held by Ncondezi, a State nominated investor, Mozambican citizens and both local and foreign strategic investors,” the coal developer said on Thursday.

While the PPPV HoTs were binding, they did stipulate that the PPPV would ultimately be structured so as to ensure the economic and financial feasibility of the Ncondezi project, and would, therefore, be subject to change if deemed necessary to satisfy the equity and debt funding requirements for financial close.

Ncondezi Energy would now focus on completing the remaining conditions precedent for the power framework agreement, with completion of this targeted for the fourth quarter of the year.

The Ncondezi mine formed part of a 300 MW integrated thermal coal mine and power plant project, located near Tete.

The power plant would be located about 90 km from the local transmission network and would, ultimately, be expanded to a capacity of 1 800 MW, while the mine would be an openpit operation targeting production of 1.3-million tons a year of saleable product for the power plant.