Agreement signed to build coal-fired power plant in Mozambique

Ncondezi Energy has signed an agreement with China Machinery Engineering Corporation (CMEC) to build a coal-fired power plant in the central province of Tete.

The Chinese state-owned group thus gets the contract for the engineering, procurement and construction of the plant with capacity to produce, in an initial phase, 300 megawatts of power, Ncondezi announced in a statement released last Thursday.

The agreement, signed in a ceremony held via videoconference, is valid for three years and provides for the start of construction work on the plant as soon as financing is secured for the project, which includes the development of a coal mine in Tete.

Ncondezi CEO Hanno Pengilly promised to "give more news in due course," while CMEC chairman Fang Yanshui assured that the Chinese group is "committed ... to completing the project in the near future."

CMEC was in negotiations with China's authorities and banks on various proposals to finance the plant, project director Zhang Daguang said in a statement released on August 23.

The plant was included in a list of priority infrastructure for Mozambique, decided jointly by the governments of China and the African country, Ncondezi said in January 2020.

The plant was originally scheduled to start operations in 2023, with plans to eventually reach an output of 1,800 megawatts allowing power exports to South Africa and Zimbabwe.

According to official data, currently only 34% of the approximately 30 million Mozambicans have access to electricity.

In March, the Mozambican President, Filipe Nyusi, defended the access to electric energy for the entire population in the next ten years. A goal that will be easier with the start-up of the power plant in Tete, underlined mining company Ncondezi.

Another mining company, Brazil's Vale, is preparing to exit the coal business in Mozambique, "in line with the company's focus on becoming 'carbon neutral' by 2050 and reducing its emissions by 33% by 2030."

Ncondezi guarantees that the Tete plant will use "state-of-the-art" technology to reduce pollutant emissions and environmental impact.

In May, a report by the International Energy Agency warned that only a complete suspension of all new power plant projects fuelled by coal or other fossil fuels would enable the world to meet the targets agreed in Paris in 2015.

According to data from the financial portal Refinitiv Eikon, China is responsible for financing 71.9% of all new coal-fired power plants currently under construction.

Ncondezi has Africa Finance Corporation (19.48%) and the Polish company Polenergia (10.31%) among the reference shareholders, and the strategic partners of the project are CMEC and the US General Electric.

Lusa Agency

Share this article