Coal-fired power station developer Kibo Mining (LON:KIBO) has agreed a rebate of US$5.5mln from its contractor for work undertaken so far on the Mbeya project in Tanzania.
The sum is part of an August agreement between Kibo and SEPCO III to give the Chinese firm exclusive bidding rights over the construction contract for the new power plant at Mbeya.
In return for the right to be the sole bidder, SEPCO III agreed to refund Kibo 50% of the development costs it had incurred so far.
The two parties settled on a figure US$10.94mln.
Kibo has already received US$1.8mln of the payment and will get the remaining US$3.7mln when the project reaches the financial close stage.
Louis Coetzee, Kibo Mining’s chief executive, said he was pleased with the agreement, which was reached at a meeting in China.
Talks over the contract for the plant’s construction had also gone well he added.
“Progress in relation to the finalization of the EPC and OEM bid proposals also exceeded our expectations and marks another major step forward in moving the MCPP towards financial close."