Ncondezi power station

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{{#badges:CoalSwarm|Navbar-Mozambiquecoal}} Ncondezi power station is a proposed 300-megawatt (MW) coal-fired power station and integrated open pit thermal coal mine in Mozambique.

Location

The map below shows Tete province, the approximate location where the plant would be built in the Zambesi coal basin.

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Background

The project involves an open pit thermal coal mine and integrated power plant. The plant would begin as 300 MW but is planned to grow to 1800 MW. The Company is targeting commissioning of the 300 MW power plant in 2017 and commercial operations in 2018. The plant would consume 7.2 million metric tons annually of coal. The power plant is expected to be built in phases of 300 MW units using domestic grade coal. Ncondezi Coal Company Limited (NCCL) completed a feasibility study for the power station in 2012.[1]

According to Ncondezi Power, the project received a Framework Agreement with the Government of Mozambique in April 2013. The Mining Concession has been granted, the power plant Environmental Social Impact Assessment has been approved and the Coal Supply Agreement has been signed. Ncondezi has agreed to a timetable with the Mozambican Government to complete the Final Form Power Purchase Agreement by the end of 2014. Project financial close is targeted by the end of 2014, followed by construction in 2015.[2]

In October 2014 Ncondezi Energy signed a non-binding agreement with China’s Shanghai Electric Power Company (SEPC) for the power station. The agreement will make SEPC the largest shareholder in the coal-fired station, with a minority stake in the Ncondezi coal mine.[3]

In June 2015 Ncondezi said it secured binding engineering, procurement and construction bids for the proposed power plant and had received bids for a mine contractor. The company said its pre-tax loss for 2014 was pushed wider by a write-down on its coal assets, but that it intended to move forward with the project.[4] Talks on the 300 MW coal plant were ongoing with SEPC in March 2016. No mention is made of a phase two, which appears to be shelved.[5]

In 2016 Ncondezi and SEPC proposed a pulverized coal (PC) boiler for the plant, rather than a circulating fluidised bed (CFB) boiler, to lower solid particles and sulfur oxides emissions. The change required a new Environmental and Social Impact Assessment (ESIA) study. The companies are targeting submission of an updated ESIA during May 2016.[6]

Financial close on the 2 x 150 MW plant was planned for 2017, and commissioning of unit 1 in 2020. Ncondezi Energy said the power station may be expanded in the future.[7]

In June 2017, Ncondezi Energy started a new partner search after it abandoned talks with Shanghai Electric Power Co on May 26 to secure funding for the mine and plant.[8]

In November 2017 Ncondezi Energy signed a non-binding offer (NBO) with China Machinery Engineering Corporation (CMEC) and General Electric South Africa. The NBO is for a binding joint development agreement as well as engineering, procurement and construction (EPC) and operations and maintenance (O&M) contracts for the development, construction and operation of the 300MW Ncondezi coal power and open pit mine project. Negotiations will be exclusive until 30 April 2018. Under the agreement, CMEC and General Electric are expected to acquire 60% of the power plant and lead project financing. Financial close is expected in Q4 2018. As well as EPC for the plant, the pair will build a transmission line to connect the plant to the grid, which will be transferred to national utility Electricidade de Moçambique on completion. Boiler technology will be changed back to circulating fluidised bed.[9]

In July 2018, Ncondezi Energy submitted an updated tariff proposal that included a 10% reduction in the previously agreed tariff rate. In November 2018, Ncondezi Energy announced that it had received a letter of support from the Ministry of Mineral Resources and Energy (MIREME) for the plant and mine, and also signed a Memorandum of Understanding (MoU) with the Mozambican state power utility Electricity de Mozambique (EDM).[10]

In July 2019, Ncondezi Energy said it had signed a joint development agreement with China Machinery Engineering and General Electric to develop the 300 MW project and mine. Ncondezi said it is expected to hold a 40% interest in the project and will be responsible for 40% of the development costs to final close.[11]

Coal mine

According to Ncondezi Power, "The Ncondezi coal mine will be an open pit, low strip ratio, contractor mining operation producing 1.3 million tonnes of coal over a 25 year life of mine to supply to the adjacent power plant." Ncondezi has been granted a Mining Concession. The mine has estimated coal reserves of 4.7 billion tonnes and resources of 120 million mineable tonnage in situ.[12]

Financing

Shanghai Electric Power Company of China is expected to invest up to US$25.5 million for the development of the project and in return will obtain a 60% share.[13]

In August 2016 Ncondezi Energy secured US$3 million from the African Finance Corporation (AFC) to develop the Ncondezi coal plant. The loan will be used to pay charges which are not included in the joint development agreement between Ncondezi Energy and Shanghai Electric Power (SEP). The loan is to be reimbursed in two tranches, the first of $1 million in 2017 and the other, $2 million, 24 months later.[14]

In May 2017 it was reported that Ncondezi Energy had drawn down a US$2.19 million shareholder loan and needed to repay double that amount. The company was in negotiations with loan holders to extend the repayment date. Discussions were also underway with SEP for US$3 million to fund ongoing development work. The next anticipated step is a US$25.5 million payment by SEP to pay for the remainder of the project's development and its financial close. At that point SEP will have a 60% share in the project. [15]

In June 2017, Ncondezi Energy said it had received a US$582,000 loan from its existing lender and senior management as funding to look for a new partner and to provide working capital. The company started the new partner search in early June after it abandoned talks with Shanghai Electric Power Co on May 26 to secure funding for the mine and plant.[16]

Project Details

  • Sponsor: Ncondezi Coal Company
  • Parent company: Ncondezi Energy
  • Location: Songo, Mozambique
  • Coordinates: -15.5958333, 32.7647222 (approximate)
  • Status: Phase I: Announced; Phase II: Shelved
  • Capacity: Phase I: 2 x 150 MW; Phase II: 1500 MW
  • Type: Circulating Fluidized Bed
  • Projected in service: 2020 (Unit 1)
  • Coal Type:
  • Coal Source: Ncondezi coal mine
  • Source of financing: African Finance Corporation (US$3 million)

Articles and resources

References

  1. Paul Baruya and John Kessels, "Coal prospects in Botswana, Mozambique, Zambia, Zimbabwe and Namibia," IEA Clean Coal Centre, Dec 2013. The report is available for purchase.
  2. "Project overview," Ncondezi Power, accessed Feb 2014.
  3. "Shanghai Electric Power Company will operate thermal power plant in Mozambique," Macau Hub, Oct. 29, 2014
  4. "Ncondezi Energy Annual Loss Widens On Coal-Related Writedown," Alliance News, June 26, 2015
  5. "Mozambique coal miners’ power station projects making ‘visible progress’" Engineering News, Mar 25, 2016
  6. "Ncondezi power project progressing well," World Coal, May 10, 2016
  7. "A Rapidly Maturing Power Opportunity," Ncondezi Energy, June 2016
  8. Dayo Laniyan, "Ncondezi Shares Jump As It Secures USD582,000 Loan For Partner Search," London South East, 23 June 2017
  9. "Mozambique: Ncondezi signs agreement with GE and CMEC," Africa Energy, 09 November 2017
  10. "Mozambique: Ncondezi Energy to conclude joint development agreement," ESI Africa, November 6, 2018
  11. "Ncondezi Energy Shares Rise on Agreement With CMEC, General Electric's Swiss Unit," Morningstar, July 23, 2019
  12. "The coal mine," Ncondezi Power, accessed Feb 2014.
  13. "Mozambique: Ncondezi Energy partners with Shanghai Electric Power Company," ESI, Jan 14, 2016
  14. "Mozambique: Ncondezi Energy secures $3mln from African Finance Corporation to develop its Ncondezi project," Ecofin Agency, Sep 2, 2016
  15. Anine Kilian, "Ncondezi seeks extension for loan payment," Mining Weekly, 10 May 2017
  16. Dayo Laniyan, "Ncondezi Shares Jump As It Secures USD582,000 Loan For Partner Search," London South East, 23 June 2017

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