Ncondezi Energy Limited US$21m Historical Costs Agreed "In Principle" (3202K)
January 04 2021 - 1:00AM
UK Regulatory
TIDMNCCL
RNS Number : 3202K
Ncondezi Energy Limited
04 January 2021
News Release
US$21m Historical Costs Agreed "In Principle"
04 January 2021: Ncondezi Energy Limited ("Ncondezi" or the
"Company") (AIM: NCCL) is pleased to provide an update on
historical development cost reimbursement negotiations with China
Machinery Engineering Corporation ("CMEC") for its integrated
Ncondezi 300MW coal-fired power project and coal mine in Tete,
Mozambique (the "Project").
Highlights
-- US$26.7m is in-principle agreed as the target Project historical expenditure
-- US$21.0m expenditure was audited by third-party and the audit
report was accepted by CMEC "in principle"
-- US$5.7m of costs relating to historical senior and project
management costs still under negotiation
-- CMEC and Ncondezi agree to finalise historical development
cost once Project power tariff has been approved by Electricidade
de Moçambique ("EDM")
Ncondezi Chief Executive Officer, Hanno Pengilly said: "It is
with great pleasure that we update investors on the positive
progress regarding agreement of Project historical development
costs to be reimbursed to the Company at Financial Close. Following
an extensive third-party audit review of the Company's historical
costs over a 10 year period, and following successful negotiations
with CMEC, Ncondezi has been able to demonstrate US$26.7m of
historical expenditure on the Project.
Of this amount, CMEC have agreed "in principle" to US$21.0m to
be recognised for future reimbursement with the balance of costs,
relating to senior and project management costs, still subject to
further negotiation. The US$21.0m represents a 24% premium to
previously agreed historical development costs.
As the Project power tariff is currently being negotiated with
EDM, both parties have agreed to finalise the historical
development costs once negotiations with EDM have been completed,
as this will also have an impact on CMEC's subscription price to be
agreed for the 60% share in the Project and the Project developers'
fee.
With this work now complete, the Company can focus its resources
on the tariff approval process with EDM and finalising the EPC
contracts with CMEC early in the new year. "
Enquiries
For further information please visit www.ncondezienergy.com or
contact:
Ncondezi Energy Hanno Pengilly +27 (0) 71 362 3566
Liberum Capital Limited Scott Mathieson, Edward Thomas, +44 (0) 20 3100
NOMAD & Joint Broker Kane Collings 2000
Novum Securities
Limited +44 (0) 20 7399
Joint Broker Colin Rowbury 9427
Pimlico Advisory
Ltd +44 (0) 777 56 55
Investor Relations Elizabeth Johnson 927
Note:
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation ("MAR"). Upon the publication of this
announcement via Regulatory Information Service ("RIS"), this
inside information is now considered to be in the public domain. If
you have any queries on this, then please contact Hanno Pengilly,
Chief Executive Officer of the Company (responsible for arranging
release of this announcement) on +27 (0) 71 362 3566
About Ncondezi Energy
Ncondezi is an African power development company with an
advanced staged, integrated 300MW thermal coal power plant and mine
project located in the Tete Province, Northern Mozambique.
The Company is focused on providing reliable, affordable and
accessible baseload energy to Mozambique and secure against the
effects of water drought and intermittency of new renewables. This
project supports Mozambique's energy strategy of universal
electricity access by 2030. According to the World Bank, only 30%
of the Mozambican population had access to energy in 2017. The
Ncondezi Project would provide 300MW of reliable and available
power helping to close the infrastructure gap of the region and
serving as a catalyst for economic development.
The power plant will be designed to be equipped with
state-of-the-art emissions controls technologies that will reduce
local air pollutants, minimizing the plant's impact on the
environment and ensuring its compliance with the most stringent
emission standards
In 2019, the Company entered into the Commercial and Industrial
("C&I") renewable and battery storage sector and in October
2019 announced its first investment in an off grid solar battery
project. The Company has also secured the right to fund a US$5.5m
C&I project development pipeline in Mozambique through a
Relationship Agreement with a C&I developer. The move into the
C&I solar and battery storage sector offers a significant
opportunity for the Company to complement the existing large-scale
baseload power project and access near term low-risk annuity income
streams which have significant growth potential.
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