Ncondezi Energy signs relationship deal with Captive Power

Ncondezi Energy updated the market on its pipeline of solar and battery storage projects in the commercial and industrial sector on Wednesday, reporting that its wholly-owned renewable energy subsidiary Ncondezi Green Power (NGP) and Captive Power (CPL) have signed a binding relationship agreement.

The AIM-traded firm said that under the deal, it had the right - but not the obligation - to fund a pipeline of commercial and industrial solar and battery storage projects in Mozambique.

It said CPL provides power solutions for businesses in Africa, with a “strong focus” on developing projects in Mozambique, and was set up by a former GridX founder.

The CPL agreement superseded the existing relationship deal signed with GridX Africa Development in May 2020.

Ncondezi said the rights and obligations of GridX and NGP under the agreement had been suspended, but could be reinstated by mutual agreement between the parties.

As part of the suspension process, GridX had agreed to novate to CPL all commercial agreements in relation to NGP's project currently under construction, and to release to CPL any rights in relation to five of the existing six projects in the pipeline.

Ncondezi said the projects under the CPL deal included a “diversified portfolio” of six potential projects in Mozambique, with a combined potential installed solar capacity of 2.8 MWp and 6.2 MWh of battery storage.

Initial project investments into qualifying projects, subject to funding, represented a potential annuity revenue stream of more than $0.75m (£0.52m) per annum.

CPL would be responsible for all costs incurred up to a project meeting the key performance indicators, and NGP exercising its right to invest, the board explained.

Initial projects were at an early stage of evaluation, with the first funding requirement not expected until later in the second half of 2021.

“The signing of a new relationship agreement with Captive Power is a no cost solution that ensures that the company retains access to a commercial and industrial project pipeline in Mozambique,” said chief executive officer Hanno Pengilly.

“CPL's management team has a strong track record in the sector operating and building relationships in Mozambique and we look forward to working with them on current and future pipeline projects as we grow our renewable commercial and industrial business.”

At 1036 BST, shares in Ncondezi Energy were up 2.82% at 3.19p.