Ncondezi Energy Limited (LON:NCCL) has provided a general update on the progress of its coal-fired power project and coal mine in Tete, Mozambique.
The AIM-listed company said it has agreed additional work requirements and updated its development programme which has been submitted for approval to the state-owned Electricidade de Moçambique (EDM).
WATCH: Ncondezi Energy CEO says immediate funding risk removed and focus now is on project deliverables
Ncondezi also said it has commissioned studies on both updated transmission integration and the Mozambican power market outlook, which are targeted for completion in the third quarter of 2020.
The firm noted that the finalisation of its tariff agreement, which was submitted on March 31, 2020, is now expected in the second half of the year, while a shareholders agreement term sheet is expected to be ready for signature in the coming weeks.
Meanwhile, an international audit firm has been appointed by Chinese firm CMEC, one of the joint development partners for the project, to undertake a historical cost audit that is targeted to complete in the third quarter.
Ncondezi is also targeting the signing of engineering, procurement and construction (EPC) contracts in the third quarter of this year.
In a statement, Ncondezi chief executive Hanno Pengilly said: "Since the submission of a formal tariff offer earlier this year, the company has worked closely with EDM to discuss and agree the pathway to progress the project. Discussions have highlighted that available technical and market assumptions critical to the project are out of date, particularly given the developments in Mozambique and the region over the last 2 years, including progress with transmission expansion initiatives, updated supply and demand forecasts and, most recently, the potential impact of [coronavirus]."
“With EDM's guidance, the company has agreed to update its transmission integration study as well as conduct an independent market study for energy supply and demand forecasts in Mozambique and potential export markets. The results of these studies should verify certain technical assumptions and provide greater certainty around the business case for the Project alongside the tariff proposal, facilitating negotiations on the project tariff. The results are also expected to be a key requirement from potential project lenders and investors”, the CEO added.
Ncondezi shares were down 13.1% at 3.7p in late-morning trading on Friday.
--Adds share price--