Ncondezi Energy on verge of signing joint development deal with GE and CMEC

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Ncondezi Energy on verge of signing joint development deal with GE and CMEC

4:02 CAT | 28 Jun 2019

For illustration purposes only[ Image: The Asset]

Ncondezi Energy Ltd (LON:NCCL) is on the verge of finalising its long-awaited joint development agreement with power industry giants China Machinery Engineering Corporation (CMEC) and General Electric South Africa.

“The JDA is currently at an advanced phase, with drafting near agreed form and CMEC and GE close to completing their necessary internal approval processes,” said the company today.

Once signed, the deal will allow for the development of the Ncondezi power project in northern Mozambique, and follows on from a successful round of negotiations with the Mozambican government and power authority in regards to project timing and indicative prices for long-term tariffs.

The idea is to build a power plant in phases, starting at a capacity of 300MW and building up to 1,800MW in due course.

Despite its small size, Ncondezi has managed to negotiate a deal that will still leave it with 40% of the project, which is in Tete, Mozambique’s most rapidly industrialising region.

2018 results

For the year ended 31 December 2018, Ncondezi recorded a loss of US$3.5mln (2017: loss of US$1.7mln).

As at 21 June 2019, the group held cash and cash equivalents totalling US$1.9mln, rnough to fund operations until December.

“The directors continue to explore options in respect of raising further funds to continue with the power plant and mine development programmes.

“At present there are no binding agreements in place and there can be no certainty as to the group’s ability to raise additional funding.”

Shares were up 2.2% to 7.3p on Friday morning.

Source: Proactive Investors