Project Update

RNS Number : 0601Z

Ncondezi Energy Limited

19 May 2021

 

News Release  

Project Update

19 May 2021: Ncondezi Energy Limited ("Ncondezi" or the "Company") (AIM: NCCL) is pleased to provide an update on the integrated Ncondezi 300MW coal fired power project and coal mine in Tete, Mozambique (the "Project").

Highlights :

· Ncondezi and their partners continue to await formal feedback from Electricidade de Moçambique ("EDM") and the Government of Mozambique following submission of all agreed studies in December 2020

· Engineering, Procurement and Construction ("EPC") power plant contract with China Machinery Engineering Corporation ("CMEC") nearing completion

· Approval received from relevant parties, including EDM, to conduct further work on optimised transmission integration solution, which is expected to further reduce costs

Ncondezi Chief Executive Officer, Hanno Pengilly said: "Following the submission of all the requested updated studies in December, as per the agreed timetable, the Company's focus has been on progressing tariff negotiations with EDM. Whilst we remain confident the Ncondezi Project offers a uniquely advanced stage proposal with a competitive solution to Mozambique's energy generation targets we continue to await formal feedback from EDM and the Government. 

The Company is proactively engaging with both EDM and Government to reach a conclusion as soon as possible. Agreement on the tariff will unlock the remaining milestones including; finalisation of the 60% subscription price to be paid by CMEC, the Power Purchase Agreement, Power Concession Agreement and Financial Close.

In the meantime, we continue to progress other parallel workstreams including signing of the EPC agreement contract for the power plant with CMEC. This is the largest construction contract for the Project and we are in the final stages of completing it ahead of signing.

In addition, we have obtained all necessary approvals, including from EDM to further develop an optimised transmission integration solution identified in the 2020 Transmission Integration Study. This has strong potential to reduce the transmission capex, further enhancing the Project's competitive offering. This work is not expected to impact tariff negotiations as it will be completed in parallel to them.

We believe the Project is in a very strong position despite frustrating delays to the completion of the tariff negotiations. We look forward to providing further updates in due course."

  Enquiries

For further information please visit www.ncondezienergy.com or contact:

Ncondezi Energy	Hanno Pengilly	[phone]
Liberum Capital Limited NOMAD & Joint Broker	Scott Mathieson, Edward Thomas, Kane Collings	[phone]
Novum Securities Limited Joint Broker	Colin Rowbury	[phone]
Pimlico Advisory Ltd Investor Relations	Elizabeth Johnson	[phone]

About Ncondezi Energy

Ncondezi is an African power development company with an advanced staged, integrated 300MW thermal coal power plant and mine project located in the Tete Province, Northern Mozambique.

The Company is focused on providing reliable, affordable and accessible baseload energy to Mozambique and secure against the effects of water drought and intermittency of new renewables. This project supports Mozambique's energy strategy of universal electricity access by 2030. According to the World Bank, only 30% of the Mozambican population had access to energy in 2017. The Ncondezi Project would provide 300MW of reliable and available power helping to close the infrastructure gap of the region and serving as a catalyst for economic development.

The power plant will be designed to be equipped with state-of-the-art emissions controls technologies that will reduce local air pollutants, minimizing the plant's impact on the environment and ensuring its compliance with the most stringent emission standards

In 2019, the Company entered the Commercial and Industrial ("C&I") renewable and battery storage sector and in October 2019 announced its first investment in an off grid solar battery project. The Company has also secured the right to fund a US$5.5m C&I project development pipeline in Mozambique through a Relationship Agreement with a C&I developer. The move into the C&I solar and battery storage sector offers a significant opportunity for the Company to complement the existing large-scale baseload power project and access near-term low-risk annuity income streams which have significant growth potential.

 

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