Power development company, Ncondezi Energy (Ncondezi), has signed a Joint Development Agreement (JDA) with China Machinery Engineering Corporation (CMEC) and General Electric Switzerland (GE) to co-develop and construct the integrated Ncondezi 300MW coal-fired power project and coal mine in Tete, Mozambique.
This agreement follows the project’s recent inclusion by Chinese and Mozambique governments on the list of key infrastructure projects in the first half of 2019.
Ncondezi non-executive chairman, Michael Haworth said: “The board welcomes CMEC and GE to the project as partners and co-developers and looks forward to working with two world class companies who will bring complimentary skills, resources and experience to deliver the project.”
CMEC will be the main EPC and O&M contractor for the project, while GE will be the exclusive subcontractor for the power project core technology, including the boiler, steam turbine, generator, and air quality control solutions which will ensure the plant meets the emission standards established by the World Bank.
GE will also supply the required parts and serve as a field advisor for the power plant maintenance.
Ncondezi is expected to hold a 40% equity interest in the project.
A company statement noted that the JDA is the key outstanding milestone to formally engage with the Mozambican Government and state power utility, Electricidade de Mocambique (EDM), on the electricity tariff and key project commercial agreements such as the Power Purchase Agreement (PPA) and Power Concession Agreement.
According to Haworth, the parties will now finalize and agree on the joint development programme to financial close, with a focus on achieving the development co-funding conditions starting with the submission of an updated electricity tariff to EDM and opening up tariff negotiations over the next six months.
He said: “The tariff and PPA process is expected to leverage off existing development work completed and not require material external cost to the company.
“Whilst key milestones are still to come, the JDA is an important step towards the goal of generating power in 2023,” Haworth concluded.