Ncondezi Energy Ltd (AIM:NCCL, FRA:9NE) (AIM:NCCL) expects to sign an Engineering, Procurement and Construction (EPC) power plant contract with China Machinery Engineering Corp (CMEC) for the 300MW Ncondezi coal-fired power project and coal mine in Mozambique during the third quarter.
A target signature date has been agreed with CMEC, the AIM-listed company said.
Ncondezi added that a number of funding proposals are also being considered to ensure that it is adequately capitalised to complete the next phase of the project’s de-risking milestones.
“The company remains confident in the Ncondezi project’s strong merits which include a focus on providing competitively priced power, both in Mozambique and the wider region, in combination with the use of the latest emission control technologies to minimise the plant’s impact on the environment and ensure compliance with the most stringent emission standards,” said Ncondezi chief executive Hanno Pengilly.
“This confidence is reinforced by agreement of a target signature date with CMEC for the power plant EPC contract of during Q3 2021, which is the main construction contract for the project and will represent a material de-risking event.
“Whilst project deliverables in 2021 have been slower than expected, the company, with ongoing support from CMEC, has worked diligently to ensure the project is properly positioned for success.
“COVID-19 lockdowns and increasing scrutiny on the rationale for new fossil fuel power generation have presented added challenges this year, however the company believes that the project is sufficiently advanced and has the necessary support to effectively navigate them and unlock value through delivery of key milestones before year end,” he said.
“CMEC remains committed to working with Ncondezi to further progress the project, and continues to progress its internal investment process and engagement with the Chinese government and financing institutions,” said CMEC project director Zhang Daguang. “CMEC is also pleased to report positive progress and support from all parties involved, which has allowed for a commitment to finalise the power project EPC agreement with Ncondezi this quarter.”