Ncondezi Energy Ltd is set to sign, during the third quarter, an Engineering, Procurement and Construction (EPC) power plant contract with China Machinery Engineering Corp (CMEC) for the 300MW Ncondezi coal-fired power project and coal mine in Mozambique.
Ncondezi said that the target signature date has been agreed with CMEC and that a number of funding proposals are also being considered to ensure that it is adequately capitalised to complete the next phase of the project’s de-risking milestones. In July 2019 Ncondezi signed a joint development agreement with CMEC and technology partner General Electric.
CMEC project director Zhang Daguang said the Chinese company “remains committed to working with Ncondezi to further progress the project, and continues to progress its internal investment process and engagement with the Chinese government and financing institutions”. “CMEC is also pleased to report positive progress and support from all parties involved, which has allowed for a commitment to finalise the power project EPC agreement with Ncondezi this quarter.”
The deal with CMEC for the power plant EPC is the main construction contract for the project and will “represent a material de-risking event”, the company says. “Whilst project deliverables in 2021 have been slower than expected, the company, with ongoing support from CMEC, has worked diligently to ensure the project is properly positioned for success”, it adds.
“The company remains confident in the Ncondezi project’s strong merits which include a focus on providing competitively priced power, both in Mozambique and the wider region, in combination with the use of the latest emission control technologies to minimise the plant’s impact on the environment and ensure compliance with the most stringent emission standards,” said Ncondezi chief executive Hanno Pengilly.
“COVID-19 lockdowns and increasing scrutiny on the rationale for new fossil fuel power generation have presented added challenges this year, however the company believes that the project is sufficiently advanced and has the necessary support to effectively navigate them and unlock value through delivery of key milestones before year end,” he said.