Mbeya Power Plant soon to close PPA negotiations (Tanzania)


By Staff Writer | ESI Africa September 19, 2017

The Tanzania-focused mineral exploration and development company, Kibo, makes progress in its advanced Mbeya Coal to Power Project (MCPP).

The company announced on Monday that it has made considerable progress in both securing project financing and progressing the Power Purchase Agreement (PPA) with Tanzania Electric Supply Company (TANESCO).

The MCPP is the company’s flagship asset, which entails the development of the Mbeya Coal Mine, a 1.5Mtpa operation, based on a defined 120.8Mt coal Mineral Resource, and the Mbeya Power Plant, a 300MW mine-mouth power station.

Mbeya Power Plant

The MCPP is being advanced to capitalise on the acute energy deficit in Tanzania and the wider east African region and has received strong support from both the government and international corporates, the company revealed in a statement.

The minerals company further disclosed that it has received formal letters of intent from multiple international EPC/ power developers and financing conglomerates keen to provide full project level equity funding for the project.

Accordingly, advanced negotiations with all potential project level investors to determine the optimal partner(s) are currently underway.

Additionally, the company’s memorandum of understanding (MoU), as a precursor to the final PPA with TANESCO, has passed all the relevant legislative stages and is waiting for final confirmation from the Attorney General.

Fixed Framework

The MoU, once signed, will provide a fixed framework within which the fundamental commercial and technical components of the PPA will be negotiated and agreed.

The CEO of Kibo mining, Louis Coetzee, said: “Throughout the years we have enjoyed an excellent working relationship with the Tanzanian government, and we continue to work successfully under the new mining framework.

“Having so many global powerhouses expressing a keen interest to partner with us is a fantastic validation of Kibo, the work we’ve done at the MCPP (which recently won the General Electric Innovation Award), and the inherent value of the project.”

Coetzee added: “Furthermore, and importantly, their interest emphasises that international companies have a continuing belief in Tanzania as an attractive investment destination.

“With the final negotiation of the PPA approaching, full feasibility studies complete and development finance on its way to being secured, this nationally significant project is reaching a tipping point that I believe will see stakeholders rewarded.”

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