Mining & Energy
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File photo: Energymx
Kibo Energy has signed non-binding power purchase and coal supply term sheets with diversified miner Vale for the Benga power plant project in Mozambique as part of the development of the company’s first pure energy project.
The fast-growing Africa-focused energy group said the power purchase term sheet signed with Vale for about 37% of the available targeted generation from phase 1 at the Benga project highlights among others the urgent need for a reliable power source in the region.
The Benga power project is for the development of a thermal coal plant of 150MW to 300MW with fuel provided by local coal producers.
The coal supply deal provides for the supply of the total coal requirement of the Benga plant over the modelled 25-year life of plant. Vale, which is in close proximity of the Benga power plant project site, produces both metallurgical/coking coal and thermal coal for the export market and aims to have a combined production rate of 20 million tonnes per year by 2021.
Kibo, which has a 65% stake in the Benga power plant project, said the signing of both term sheets paves the way for further integration possibilities between the two companies.
CEO Louis Coetzee said the finalisation of both term sheets in a short span of time after the completion of a base case definitive feasibility study and independent financial model clearly reflects the commercial robustness of the project.
“Ultimately, this demonstrates the urgent need and fast-growing demand for electricity in a mineral and resource rich region, which will remain unexploited without access to reliable and affordable electricity.”
Coetzee said Kibo has also had further formal talks this week with Mozambique’s national utility EDM to develop and ultimately agree on a power purchase agreement (PPA) for the balance of the electricity that will be produced from Benga and not sold to private off-takers.
Kibo is aiming for execution of a final binding PPA in the fourth quarter of the year in compliance with all relevant regulatory and statutory requirements.
By Fadia SalieSource: Energymx
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