JOHANNESBURG (miningweekly.com) – Aim-listed Edenville Energy and Chinese State-owned hydropower engineering and construction company Sinohydro Corporation have signed a memorandum of understanding (MoU) for the codevelopment of Edenville’s integrated Rukwa coal-to-power project, in western Tanzania.
The MoU, which is valid for 18 months and gives both companies exclusive rights to work with each other on the project, sets out the basic terms for the parties to build a strategic partnership and is aimed at the establishment of a formal joint venture (JV) contract.
Should the parties form a JV, Sinohydro will be the engineering, procurement and construction contractor for the project.
Under the terms of the MoU, Sinohydro will incur costs of about $1-million on work related to a bankable feasibility study on the proposed Rukwa power plant.
The company’s project team will also use their experience of working with Chinese and other financial institutions to assist in exploring appropriate funding options available for development capital to be used for construction.
Edenville, meanwhile, will be responsible for the continued development of the coal mine portion of the project, along with the permitting and legal aspects to advance the power plant to its construction phase.
"Sinohydro's broad experience in Africa and its presence in Tanzania for over a decade give us the confidence that the company can execute the construction process efficiently and cost effectively,” Edenville CEO Rufus Short said in a statement on Monday.
Edenville’s share price on the LSE rose by 20% early on Monday.