What it owns
Ncondezi
The project is in the heart of Tete, Mozambique’s most rapidly industrialising region and a hub for power generation.
Total capital expenditure is expected to be US$1.1bn and once completed it will be one of the largest generation plants in the country.
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.
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 is doing
In March, Ncondezi signed a Master Services Agreement with Synergy Consulting to provide financial and transaction advisory services in regard to the integrated 300MW coal-fired Ncondezi power project and coal mine in Tete, Mozambique.
The agreement covers potential advisory services to the project up to financial close, including the finalisation of a power tariff with Electricidade de Moçambique, negotiations with China Machinery and Engineering Corporation on project subscription price, negotiations with lenders for debt financing, and capital raising for Ncondezi's equity contribution.
In solar, meanwhile, re-mobilisation of construction works at its solar power project in Mozambique is underway.
The project is the maiden commercial and industrial project for Ncondezi Green Power (NGP), the AIM-quoted firm’s wholly-owned renewables subsidiary.
What the boss says: Hanno Pengilly, chief executive
“This is the first of our pipeline of green energy C&I assets to near completion and is expected to provide near term revenue for the company.
“Although the impact of COVID-19 delayed the Project delivery timetable, the demand for sustainable energy solutions that provide increased energy security whilst also reducing costs has become more robust.”
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What the analysts say
Analyst at broker Canaccord Genuity said Ncondezi’s future lies beyond its current development of a thermal power station in Mozambique and in off-grid solar generation.
“The cost of solar is already highly attractive compared to off-grid diesel power, and with this cost expected to keep falling sharply we see customers moving increasingly to onsite off-grid generation,” the broker said.
There is sufficient coal in Ncondezi’s licence for a series of similar power stations, adds Canaccord, with export potential as well as Mozambique’s neighbours also chronically short of power but the plan is to build a 300 MW plant, supplied by 1.5mln tons of coal annually.