Ncondezi aims for submission of financial model by June

AIM-quoted power development company Ncondezi issued an update on its attempts to wrap up a binding joint development agreement over its integrated 300-megawatt power and coal mine project in Mozambique on Thursday, noting that "positive initial results" had continued to support the "viability" of the project.

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Ncondezi updated its integrated financial model for the project with proposals for engineering, procurement, and construction and operations and maintenance contracts after an initial review indicated that there was the potential to deliver a "more competitive power tariff" to Electricity de Mozambique and the Ministry of Mineral Resources and Energy for approval.

The financial model was still under review by potential partners.

Ncondezi's project consists of two 150 megawatt coal-fired power plants, an open pit coal mine and, in addition to a 92km transmission line connecting into the Mozambican northern power grid, a 2km conveyor connecting to the power plant together with common infrastructures such as water dams, dumps, electrical reticulation and villages.

Ncondezi's non-executive chairman, Michael Haworth, said, "Although still at an early stage, the preliminary results from the updated engineering, procurement, and construction and operations and maintenance information in the financial model are positive and allude to the potential for delivery of a more competitive tariff to the Mozambican Government and Electricity de Mozambique for approval."

"This also represents a significant milestone in the Project development process as the Company did not reach this stage of development with its previous potential partner. The next phase of the partner process is to finalise the financial model by the end of May 2018, confirming a new tariff envelope which can be submitted to Ministry of Mineral Resources and Energy and Electricity de Mozambique during June 2018," he added.

Ncondezi was confident that, should support be received for the new tariff envelope, it would be "well-positioned" to close out the JDA process and progress the project to its financial close.

As of 0950 BST, Ncondezi shares had lost 0.50% to 7.81p.