JSE- and Aim-listed independent power plant producer Ipsa has taken back ownership of Elitheni Clean Coal and entered into an option agreement to buy a site on which it could build a new Eastern Cape power project.

Ipsa said that Elitheni Clean Coal, which is now a fully owned subsidiary, would buy the land adjacent to its mine and abutting the railway line between Indwe and East London.

Elitheni Clean Coal has appointed Savannah Environmental to start the initial phases of the environmental impact assessment (EIA) work. The EIA would start next month.

The cash-strapped Ipsa, which has been battling to find buyers for four turbines that formerly had been earmarked for its Coega project in order to repay a Standard Bank loan, said funding for the equipment of the Elitheni Clean Coal project would be provided under an export guarantee-financing package.

The company had already identified potential suppliers of circulating fluidised bed boilers and turbines for the power station.

Ipsa also said that it planned to enter into private power purchasing agreements with large power users. This comes as Eskom had put on hold the process for tendering power purchasing agreements with IPPs.

The company added that Eskom had already announced the introduction of punitive tariffs of over R2 000/MWh for users which failed to cut consumption to 10% below their usage levels of 2008.

In total, Ipsa intended to develop up to 1 000 MW of clean coal power plant capacity throughout the Eastern Cape between East London and Port Elizabeth.

Meanwhile, the company explained that it had it had taken back ownership of Elitheni Clean Coal, in which Exodus Africa would have acquired a 50% stake for $5-million. The deal was announced in November, but Ipsa said that the agreed term had expired and that it had not received payment.