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Ncondezi inks deal for solar, storage projects in Mozambique’s C&I space
3:48 CAT | 06 May 2020
Efacec solar plant in Metoro, north of Mozambique
Ncondezi Energy Ltd (LON:NCCL) has signed a binding relationship agreement with renewables firm GridX Africa Development to fund a pipeline of solar and battery storage projects for the commercial and industrial (C&I) sector in Mozambique.
The portfolio includes seven identified potential projects totalling 2.8 MWp of solar photovoltaic (PV) and 4.5 MWh of battery storage capacity to be developed by GridX.
Under the terms of the agreement, Ncondezi has the right of first refusal to fund 100% of the projects up to a total of US$5.5 million (EUR 5.1m). The African power development company has said it will make investment decisions on project by project basis.
To be considered for funding, all projects have to meet minimum key performance indicators (KPIs), among them signed off-take agreements, use of proven technology, secured consents and permits to start construction. Until the KPIs are met, GridX bears the costs of the project development.
The initial set of seven projects are at an early stage of development. The first funding requirement is not expected until late 2020 and early 2021, Ncondezi said.
The projects have a potential to bring over US$750,000 in revenues per year. They will be tucked under the company’s newly-founded renewables unit Ncondezi Green Power.
Presently, the initial projects are at an early stage of development, first funding requirements are not presently expected until the fourth quarter of 2020 or the first quarter of 2021.
“We are pleased to have finalised the Relationship Agreement with GridX and believe it provides an optimal structure for Ncondezi to build out its C&I solar and battery storage strategy, bringing a focused portfolio of potential projects in Mozambique, which we will have full control over, in a jurisdiction we know well,” Hanno Pengilly, Ncondezi chief executive said in a statement.
“This structure provides the opportunity for a phased and low-risk entry point into the sector, with GridX responsible for the development and delivery of construction-ready projects for investment consideration and, over time, a diversified portfolio approach spreading investment risk across multiple projects.”
Pengilly added: “These projects, along with our existing solar and energy storage facility currently under construction, represent a combined installation potential of 3.2 MWp of solar PV and 5.5 MWh of storage with potential revenues of over US$950,000 per annum.”
“We believe the C&I solar and battery sector continues to represent a significant opportunity for the company, and the relationship agreement allows us to develop our presence in the sector as we progress our flagship 300MW integrated coal to power project to Financial Close.”
The binding agreement follows an originally proposed partnership, announced in April 2019.
Source: Renewables Now / Proactive Investors
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