LONDON (Alliance News) - Ncondezi Energy Ltd said Monday that it has inked a joint development agreement with Shanghai Electric Power Co Ltd to develop its Ncondezi 300 megawatt coal fired power project in Tete, Mozambique.
Shanghai Electric will invest up to USD25.5 million to fund development costs in return for a 60% stake in Ncondezi Power Co SA, a subsidiary that will hold 100% of the power project. This is anticipated to be sufficient to fund the development costs to financial close of the power project, and any additional costs are expected to be funded on a pro-rata basis by the company and Shanghai Electric respectively.
Ncondezi has granted Shanghai Electric exclusivity in relation to the power project until either the termination of the joint development agreement or February 8, 2016, depending on whichever comes earlier.
The Ncondezi Coal Mine will continue to be wholly owned by Ncondezi, the company said, and will be developed and financed separately.
Shares in Ncondezi are up 80% to 6.75 pence Monday afternoon following the news.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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