Solgenics Ltd (AIM:SGN), a leading solar energy group, has announced an update on offtake discussions for its flagship renewable energy project, the Tete Solar Project in Mozambique.
The company has signed multiple non-disclosure agreements with potential power offtakers for the first-phase 100MW plant, demonstrating significant progress towards the project's development.
Solgenics has updated its project development program to deliver a bankable feasibility study (BFS) with the completion of several key project workstreams, including:
- Market sounding on power tariff key assumptions (capex, opex and financing costs)
- Offtaker power tariff approval
- Offtaker signature of Power Purchase Agreement (PPA)
- Completion and Government approval of Project Environmental and Social Impact Assessments Studies (ESIA)
The BFS, which is expected to take between nine and 12 months, has a budgeted cost of up to US$1.5mln (£1.2mln) which will need to be secured before any workstreams can be launched
To secure funding for the BFS, Solgenics has launched a funding strategy focusing on non-dilutive structures.
The company is targeting project-level development loans from potential funders, including development funding institutions and independent power producers.
Multiple NDAs have been signed for potential funding, and the company is aiming to select a preferred funding partner in the second quarter of 2023.
In a statement, Solgenics' chief executive Hanno Pengilly commented: “The company has entered an exciting phase of development with a material opportunity to unlock value over a nine to 12-month period, reflected in the positive engagement with potential offtakers and funders.”
Pengilly added: “The BFS is expected to increase confidence levels around the power tariff inputs assumptions, which is important to both project financiers and Offtakers, particularly given that the Project is targeting a long-term 25-year PPA.”