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Ncondezi Energy wants to fill power gap in Mozambique

Snapshot

  • Developing power station in northern Mozambique
  • Construction will be in 300Mw phases up to 1,800Mw
  • Advancing to finalise energy tariff terms
  • New CEO appointed to move the project forward
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Quick facts: Ncondezi Energy Ltd

Price: 5.17 GBX

AIM:NCCL
Market: AIM
Market Cap: £16.8 m
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What it owns

Ncondezi

“It’s a billion-dollar project,” says chief executive Hanno Pengilly.

The project is in the heart of Tete, Mozambique’s most rapidly industrialising region and a hub for power generation.

In July 2019, a joint development agreement was signed with Chinese firm CMEC and US group General Electric.

Ncondezi Energy (LON:NCCL) will look to retain a 40% equity stake in the project.

Around US$700mln of the construction costs could be funded by debt, leaving the partners with a total of US$300mln to find between them.

On the share register are the African Finance Corporation, a specialist Africa infrastructure fund, and Polenergia that together hold approximately 30% of the company’s issued shares.

Solar Power

Separately, Ncondezi has a joint venture deal with GridX Africa Development with a view to building captive solar and battery storage solutions for commercial and industrial use.

GridX has 15 solar and battery storage projects, of which six are at an advanced stage.

How it's doing

On 17 January, Ncondezi told investors that it expects to finalise power tariff negotiations in the first half of 2020.

"The process to finalise a tariff offer for submission to EDM is well underway and on track for submission in Q1 2020,” said Hanno Pengilly, Ncondezi's chief executive in a statement.

“The company continues to work closely with its strategic partners and tariff financial advisor to achieve a competitive firm tariff offer in line with the latest agreed tariff rates in Mozambique,” he added.

Ncondezi said that the tariff financial model I on track for submission to strategic partners at the end of this month. It added that it is targeting a competitive tariff rate, in line with other recent agreements with Electricidade de Moçambique (EDM).

In November, Ncondezi said it had received support “in principle” for a restructuring of an outstanding US$4.3mln loan plus interest.

The restructuring involves a 12-month extension on existing terms, including 12% annual interest rate and the ability for lenders to swap debt for equity in part or in full at a conversion price of 10p per share

Hanno Pengilly, Ncondezi's chief executive said in a statement: “The restructuring will provide additional time to explore future refinancing options and the company has received several refinancing offers to date.

“Management is concentrating on further de-risking the 300MW Ncondezi power project over the next 3 to 6 months and the proposed restructuring will provide the team with sufficient time it needs to do that.”

What the CEO says: Hanno Pengilly

“Ncondezi is uniquely positioned to take advantage of baseload power generation development in Mozambique at an important time for the country.

“The company's 300MW Ncondezi project is one of the most advanced baseload power plant projects in Southern Africa with market-leading co-development partners.”

Video

Inflexion points

  • Interim COO appointed to lead technical processes at Tete
  • Finances for Ncondezi agreed and put in place
  • Permits agreed and construction gets underway in Mozambique
  • Expansion of GridX solar project
  • JDA timetable for Ncondezi

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Watch

Ncondezi Energy seeing 'building momentum and support' for its flagship...

Ncondezi Energy Ltd's (LON:NCCL) Hanno Pengilly updates Proactive London's Andrew Scott following meetings held with the Inter-Ministerial Committee for China and Mozambique around the development of its 300MW power project. He says several areas have been identified to potentially speed up...

on 20/12/19

3 min read