LONDON (Alliance News) - Ncondezi Energy Ltd Monday said it has signed a non-binding power purchase and transmission deal with Electricidade de Mozambique, the state-owned power utility, for its 300 megawatt integrated thermal coal mine and power plant project near Tete in northern Mozambique.
It has also signed a non-binding deal for the supply of coal from the Ncondezi coal mine for 25 years.
It said both the deals will be finalized during the first quarter of 2014.
Under the so-called head of terms agreement, which is signed ahead of detailed formal agreements, Electricidade de Mozambique will be the exclusive buyer of the electricity generated by the first phase 300 Megawatt unit of the Ncondezi Project for a 25 year period from the date of commercial operation, which is being targeted for the first half of 2018.
Ncondezi Energy will be responsible for the design, construction, commissioning, ownership, operation and maintenance of the power plant, and making available the entire capacity of the power plant and net electrical output to EdM on an exclusive basis.
It said the tariff composition has been agreed and will cover fixed, capacity, energy and ancillary service payments for the power plant, and will be subject to appropriate indexation. It didn't give details.
"The signing of the (agreement) significantly accelerates the project momentum built over the past five months as it confirms EdM as the main offtaker for the first 300MW generated," Ncondezi Energy Chief executive Paul Venter said in a statement.
The company's shares were down 2.2% at 11 pence Monday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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