Ncondezi Energy has updated the market on the Ncondezi 300MW integrated coal-fired power project and coal mine in Tete, last week, reporting that the company and its partners are still waiting for formal feedback from Electricidade de Moçambique (EDM) and the Mozambican government after the presentation of all the studies agreed upon in December.

The AIM-traded company said that a power plant engineering, procurement and construction contract with China Machinery Engineering Corporation (CMEC) is nearing completion. The company had already received approval from relevant parties, including EDM, for further work on an "optimized transmission integration solution," which is expected to further reduce costs.

"Following the submission of all the requested updated studies in December in accordance with the agreed schedule, the company's focus has been on progressing the tariff negotiations with EDM," said Chief Executive Officer Hanno Pengilly to then add that: "while we remain confident that the Ncondezi Project offers a uniquely advanced stage proposal with a competitive solution to Mozambique's power generation objectives, we are still awaiting formal feedback from EDM and the government."

According to the CEO, the company is proactively engaging with both the EDM and the government to reach a conclusion as soon as possible.

Nevertheless, Pengilly also said, the agreement on the tariff would "unlock" the remaining milestones, including finalizing the 60% subscription price to be paid by CMEC, the power purchase agreement, the power concession agreement, and financial close.

"Meanwhile, we continue to make progress on other parallel work streams, including the signing of the engineering, procurement and construction contract for the power plant with CMEC. This is the largest construction contract of the Project and we are in the final stages of completing it prior to signing."

In addition, Pengilly said that the company had obtained all necessary approvals, including from EDM, to further develop an optimized transmission integration solution as identified in the 2020 transmission integration study.

"This has strong potential to reduce transmission capital expenditures, further enhancing the competitive offering of the project. This work is not expected to impact the tariff negotiations as it will be completed in parallel with them. We therefore believe that the project is in a very strong position despite the frustrating delays in completing the tariff negotiations," Hanno Pengilly concluded.