Ncondezi Energy Ltd (LON:NCCL) said positive tariff negotiations continue as part of its plan to sell all power generated by its 300MW coal fired power project and coal mine in the Tete Province to Electricidade de Moçambique (EDM).
“Finalising the tariff will unlock all the remaining milestones and while we aim to provide updates as regularly as possible, we must balance this with the sensitive nature of such negotiations,” said Ncondezi chief executive Hanno Pengilly. “We continue to believe the project is in a very strong position as it is technically sound, has a financing plan in place and able to provide a commercially attractive tariff.
“We are at an advanced stage in our negotiations with both EDM and the government.”
The next step for the AIM-listed company is receipt of formal feedback from EDM and the government of Mozambique following submission of agreed studies in December 2020.
“All the requested information has been delivered and further questions have been answered. We are now awaiting formal feedback from both EDM and the government which will drive the project timetable for the next critical milestones,” said Pengilly.
“The project remains the most advanced baseload power project in the area with the ability to supply the required power to the grid, in-line with current government generation policy targets,” he said.
China Machinery Engineering Corp (CMEC) has reiterated its support for the project in Northern Mozambique.
“The project also benefits from strong partner support as demonstrated by CMEC's commitment to certain early works budget. This has ensured that the work necessary for the project to meet Chinese investment standards has continued during the negotiations,” added Pengilly.
In a seperate statement, Ncondezi said it issued 4.35 million shares in lieu of certain deferred salaries, awarded bonuses and outstanding contractor, adviser and consultant fees.
Pengilly subscribed for 3.24 million shares: 2.00 million at 4.5 pence each in relation to contractual bonuses and 1.24 million at 3.0p each in relation to his deferred salary between April 2020 and November 2020.
"At the height of the COVID-19 pandemic, 30% of salaries and fees were deferred for 8 months to ensure that the company was adequately funded until the end of 2020," said chairman Michael Haworth. "Hanno Pengilly also confirmed, in November 2020 his intention to subscribe for shares in the company in relation to all of his 2019 and 2020 bonus due to him."