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Ncondezi making progress on Mozambique power deal

25th October 2013

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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London-listed Ncondezi Energy was one step closer to securing a binding power purchase agreement (PPA) with Mozambique State-owned power utility Electricidade de Mozambique (EDM) after signing nonbinding heads of terms earlier this month.

The nonbinding power purchase and transmission agreement heads of terms was a precursor to negotiating a full and binding PPA.

Ncondezi said negotiations were expected to start “imminently” and conclude with a final agreement in the first quarter of 2014.

“The signing of the PPA heads of terms signi- ficantly accelerates the project momentum built over the past five months, as it confirms EDM as the main offtaker for the first 300 MW gene- rated [from the Ncondezi project],” CEO Paul Venter said.

Ncondezi Energy expected to commission the first 300 MW, of the planned 1 800 MW, of its 100%-owned Ncondezi project, in Tete province, in northern Mozambique, in 2017, followed by commercial operations during the first half of 2018.

The first 300 MW phase would supply domestic consumers in Mozam- bique using reinforced existing transmission capacity to meet current demand.

EDM would be the exclusive buyer of the electricity generated by the first phase of the integrated thermal coal mine and power plant project for a 25-year period.

The PPA’s heads of terms stipulated that Ncondezi would be responsible for the design, construction, commissioning, ownership, operation and maintenance of the power plant, as well as make available the entire capacity of the power plant and net electrical output to EDM on an exclusive basis, besides others.

The design, construction and commissioning of a transmission line would be transferred to EDM for operation and maintenance once commissioned.

Ncondezi also concluded the heads of terms for a coal supply agreement with the Ncondezi coal mine, with a final agreement expected in the first half of 2014.

Edited by Martin Zhuwakinyu
Creamer Media Magazine Managing Editor

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