LONDON (Alliance News) - Shares in Ncondezi Energy Ltd rose early Monday after the company said it has signed a non-binding memorandum of understanding with Shanghai Electric Power Co Ltd on a deal which may see the Chinese group become controlling shareholder in a Mozambique power project.
Under the terms of the deal, Shanghai Power may become the controlling shareholder in the 300 megawatt Ncondezi project near Tete in northern Mozambique.
The MoU outlines plans for Ncondezi and Shanghai Power to further cooperate on creating a joint venture agreement in the fourth quarter of this year.
Along with the stake in the Mozambique power project, the pair are working on a deal which would also see Shanghai Power buy a minority stake in the Ncondezi mine project.
"The formalising of the relationship between Ncondezi and Shanghai Power through the signing of this MoU is a significant step toward agreeing a transaction which will bring the Ncondezi Power Project to commercial realisation. Shanghai Power brings a wealth of power plant financing, construction and operating expertise that will be a major benefit to both the power project and Mozambique," said Ncondezi Chief Executive Officer Paul Venter.
Ncondezi shares were up 18.6% to 6.67 pence in early trade, making it one of the best performers on the AIM All-Share index.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
Copyright 2014 Alliance News Limited. All Rights Reserved.