Ncondezi Energy Moves Ahead With Coal Project in Mozambique With China´s CMEC


Ncondezi Energy Limited has submitted to Mozambique´s electricity utility, EDM, the Transmission Integration Study for its Ncondezi 300MW coal-fired power project and coal mine in Tete province, in which it partners with China Machinery Engineering Corporation (CMEC).


Progress on the development of Ncondezi Energy’s flagship 300 MW coal-fired power project and coal mine in Tete was delayed in June, after EDM indicated that available technical and market assumptions for a tariff agreement, which were initially submitted March 31, were out of date.


According to a statement by Ncondezi, the new Transmission Integration Study has been completed and submitted to EDM for review.


The study, which will be used by EDM to provide approval on the project transmission option to connect into
the Mozambique grid, evaluated a number of transmission connection options for the Project taking into account current and planned changes to the network since the last study was completed with EDM.


According to the company´s CEO, Hanno Pengilly, the results of the new report “look encouraging and have identified a number of optimisations which have the potential to improve transmission line cost, strengthen the grid and facilitate future transmission expansion plans.


“Tariff negotiations are continuing in parallel and are progressing positivly. The team continue to work tirelessly to reach our goals and we look forward to providing further updates in due course”, Pengilly added.


In June 2017, Ncondezi Energy started a new partner search after it abandoned talks with Shanghai Electric Power Co on May 26 to secure funding for the mine and plant. In November that year, it signed a non-binding offer (NBO) with China Machinery Engineering Corporation (CMEC) and General Electric South Africa.


The NBO is for a binding joint development agreement as well as engineering, procurement and construction (EPC) and operations and maintenance (O&M) contracts for the development, construction and operation of the 300MW Ncondezi coal power and open pit mine project.


Under the agreement, CMEC and General Electric are expected to acquire 60% of the power plant and lead project financing. Financial close is expected in Q4 2018. As well as EPC for the plant, the pair will build a transmission line to connect the plant to the grid, which will be transferred to national utility Electricidade de Moçambique on completion.


In July 2019, Ncondezi Energy said it had signed a joint development agreement with China Machinery Engineering and General Electric to develop the 300 MW project and mine. Ncondezi said it is expected to hold a 40% interest in the project and will be responsible for 40% of the development costs to final close.


Photo: Map of Tete coal project (Ncondezi)

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