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 a 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
Ncondezi has completed all in-house work streams and application requirements to enable the finalisation of the agreements and is in the closing stages of negotiating the key detailed parameters of the power purchase agreement (PPA) and power concession agreement  (PCA) with the Mozambican Department of Energy (DoE) and State energy group Electricidade de Moçambique (EDM) for its 300 MW power plant project.

A revised timeline has been agreed upon with the DoE and EDM and the formal submission of both agreements is expected by mid-August. In addition, the transmission engineering, procurement and construction (EPC) tender process has been initiated.

The project's economic parameters have also been predominantly finalised and the company is negotiating within an indicative tariff range and fiscal incentives package.

In addition, the power plant capital and operating costs have been confirmed through the receipt and further clarification of binding EPC and mine contractor bids. Detailed discussions have been held with export credit agencies and commercial banks regarding the level of financing support.

Ncondezi has received several expressions of interest from potential investors with regard to participating in the equity of the project once it has executed the PPA and PCA.

Moreover, negotiations with potential co-developers are at an advanced stage and the company expects to update shareholders during the third quarter of the year.

Ncondezi is fully funded to complete the PPA, PCA and co-developer processes.

Key Contracts and Suppliers
Parsons Brinckerhoff (DFS).

On Budget and on Time?
CEO Paul Venter has commented that the bespoke nature of the agreements, particularly the PPA and PCA, took longer than expected as Ncondezi was negotiating complex agreements spanning 25 years of power generation and offtake in Mozambique.

“However, we are in the final stages and all parties involved remain committed to completing negotiations by mid-August. Fortunately, these minor delays do not impact on the overall project schedule and we are still targeting project close by year-end and construction in the second half of 2015,” he notes.

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.