Ncondezi Energy has entered into negotiations with partners to construct and operate its 300 MW coal-fired power project.
The company is discussing with China Machinery Engineering and General Electric South Africa to develop, construct and operate the integrated Ncondezi coal fired power project and open pit coal mine in Tete.
With significant experience in Africa, China Machinery Engineering and General Electric South Africa are set to clinch the deal. And Ncondezi is expected to agree to non-binding agreement giving the two companies a chance to acquire a minimum 60% equity stake in the integrated project.
Meanwhile the non-binding agreement grants exclusivity until 30 April 2018 to conclude a binding joint development agreement (JDA).
The JDA will set out the commercial terms on which the parties will complete the acquisition and jointly develop and fund the integrated project up to and including financial close.
Indications are that China Machinery Engineering and General Electric South Africa are to lead project debt financing in conjunction with Ncondezi for both the power project and mine project at FC
China Machinery Engineering and General Electric South Africa will be responsible for the engineering, procurement and construction (EPC) and operations and maintenance (O&M) for the integrated project on a build own operate basis.
“Ncondezi Energy is pleased to announce agreeing to enter into exclusive negotiations with CMEC and GE, following an intensive process to identify a new partner to take a leadership role in delivering the 300 MW coal fired power project and integrated mine,” said Ncondezi Energy non-executive chairman, Michael Haworth.
The non-binding agreement proposes to develop the power plant and mine projects as an integrated project, which has the potential to greatly simplify the development, commercial and financing aspects.