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 of coal a year.

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 include wet mechanical draft cooling towers, which will enable the units to operate at higher thermal efficiency.

Value
Initial Phase 1A 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
The Ncondezi power project has been included in Mozambique’s electrification and power generation strategy.

Ncondezi fulfilled all conditions precedent to the Power Framework Agreement with the local government in December last year and as a result received a formal endorsement of the project from the Mozambique government.

The project’s entire 300 MW gross output is expected to be supplied to Mozambique’s State-owned electricity provider Electricidade de Moçambique (EdM), providing a significant boost to the country’s northern grid, which is one of its fastest growing regions in terms of energy demand.

For the power framework agreement to become binding, the company has signed several heads of terms (HoTs) agreements and has agreed on the key parameters of the project.

This includes confirmation that EdM will be the power plant's exclusive purchaser of electricity through a commercial tariff structure. In addition, binding HoTs have been signed for the power-plant project vehicle, which provides for an agreed government and local participation mechanism, the final details of which are expected be negotiated this year.

The company expects to enter a final round of negotiations to turn the HoTs  agreements into binding commercial agreements during the second quarter of this year.

Ncondezi continues to target project close by the end of the fourth quarter of this year to start construction of the power plant during 2015, with commissioning expected in the second half of 2012 and commercial operations in the first half of 2018.

With regard to the Ncondezi coal mine, Ncondezi chairperson Michael Haworth says the emphasis over the past year has been on improving the efficiency of the development of a smaller openpit mining operation, initially focused on supplying the first 300 MW power plant.

The openpit mining operation will be operated and managed by a contractor for which Ncondezi received final binding quotes during the first quarter of this year, with mining operations expected to start in 2017.

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.