Name and Location
Ncondezi power plant project, Tete, Mozambique.

Client
Ncondezi Energy. The power plant is expected to be developed in partnership with a power plant developer and operator.

Project Description
The definitive feasibility study (DFS) on the Ncondezi power plant project has confirmed the economic and technical viability of an 1 800 MW mine-mouth, thermal coal-fired power plant, consuming 7.2-million tons a year of coal.

The power plant is expected to be built in phases of 300 MW units using domestic coal from the proposed Ncondezi coal mine.

Each 300 MW power block will comprise a steam generator using circulating fluidised-bed technology, a steam turbine and a generator; as well as a wet-type cooling condenser system and electrostatic precipitators. It is proposed that the cooling system  includes wet mechanical draft cooling towers, which will enable the units to operate at higher thermal efficiency.

Value
Initial 300 MW power plant capital expenditure (capex) is estimated at $504-million, with additional capex of $50-million for transmission.

Phase 1B (600 MW) will cost about $1.1-billion.

Phase 2 (1 800 MW) will cost about $2.25-billion, with a further $247-million for transmission.

Duration
The initial 300 MW Phase 1A unit is expected to be commissioned in 2017. Expansion to 1 800 MW is targeted for 2023.

Latest Developments
Ncondezi is one step closer to securing a binding power purchase agreement (PPA) with Mozambique State-owned power utility Electricidade de Mocambique (EDM) after signing the nonbinding heads of terms.

The nonbinding power purchase and transmission agreement heads of terms is a precursor to negotiating a full and binding PPA.

Negotiations are expected to start “imminently” and conclude with a final agreement in the first quarter of 2014.

EDM will be the exclusive buyer of the electricity generated by the first phase of the integrated thermal coal mine and power plant project for a 25-year period.

The PPA’s heads of terms stipulate that Ncondezi will be responsible for the design, construction, commissioning, ownership, operation and maintenance of the power plant, as well as for making the entire capacity of the power plant and net electrical output available to EDM on an exclusive basis, besides others.

The design, construction and commissioning of a transmission line will be transferred to EDM for operation and maintenance once commissioned.

Ncondezi has also concluded the heads of terms for a coal supply agreement with the Ncondezi coal mine, with a final agreement expected in the first half of 2014.

In addition to buying the electricity from the plant, EDM will be required to pay tariffs, ensure the ongoing operation and maintenance of the transmission connection and provide assistance to enable the power plant to undertake its testing and commissioning procedures.

Ncondezi is targeting completion of the remaining conditions precedent during this quarter to make the power framework agreement effective by the end of this year, which will enable it to begin power concession agreement negotiations, a key component of the PPA.

Key Contracts and Suppliers
Parsons Brinckerhoff (DFS).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Ncondezi Energy, tel +44 207 183 5402, fax +44 207 183 5411 or email info@ncondezicoal.com.
Parsons Brinckerhoff, tel + 1 212 465 5000 or fax +1 212 465 5096.