Energy commodity developer Edenville Energy has extended the validity of its memorandum of understanding (MoU) with hydropower engineering company Sinohydro Corporation of China, over the Rukwa coal project, in south-west Tanzania, to December 2019.

Sinohydro is the Chinese engineering, procurement and construction contractor working alongside Edenville to advance the Rukwa coal-to-power project.

The MoU has been extended for a further 18 months, to allow for tasks to be completed on the technical and financial aspects of project development and construction, Edenville said on Monday.

The company added that, with greater clarity now being provided on the Tanzanian government’s plans for power development in western Tanzania, Edenville and Sinohydro can focus on optimising the project parameters in anticipation of the construction of the Sumbawanga to Tunduma section of the Zambia–Tanzania–Kenya (ZTK) power transmission line and associated infrastructure.

While a feasibility study on a 120 MW power plant has already been carried out, the potential for a significantly larger plant of up to 300 MW is now being considered and much of Sinohydro's work will be focused towards this option.

Edenville anticipates the workload for both parties to increase significantly over the coming months as the options for power development are progressed, following the recent announcement regarding the World Bank approving funding for the ZTK grid infrastructure.

In parallel, work is already well advanced on baseline environmental studies to progress to a completed environmental- and social-impact assessment. 

This, along with the knowledge obtained from opening up the company's Rukwa coal deposit, will be used by Sinohydro engineers to advance the design and planning for the power plant.

Although no assurances can be given at this stage that the MoU will lead to a successful outcome for Edenville, it believes the extension of the MoU is a positive development.