African power development company, Ncondezi Energy Limited, has announced the launch of a feasibility study (FS) for the 300MW solar photovoltaic (PV), and Battery Energy Storage System (BESS) project in Tete, Mozambique. The project is under the stewardship of Ncondezi’s wholly owned green energy subsidiary, Ncondezi Green Power Holding Ltd (NGP).
The feasibility study is expected to take approximately 4 months to complete, and will be led by consulting engineering firm, WSP Group Africa (Pty) Ltd.
“The Solar Project represents a significant opportunity to further define the project and crystalise additional value for shareholders. The Company has taken measured steps to get to this point including the completion of a pre-feasibility study and positive engagement with Mozambique authorities,” said Ncondezi Chief Executive Officer, Hanno Pengilly.
“The Solar Project is uniquely positioned to leverage existing advanced stage development work from the Company’s 300MW thermal power project, which is expected to significantly cut development costs and accelerate project delivery with first power potentially on the grid by 2024,” Pengilly adds.
Ncondezi targeting SAPP offtakers
The Solar Project will be located within the Ncondezi mining concession 5967C which covers over 25,000 hectares in the districts of Moatize and Chiuta in the Tete Province, which is large enough for solar PV generation potential over 5,000MW. Additionally, three preferred site locations have already been identified, with similar climate conditions, that provide a generation potential of c.500MW each.
The concession area has above average Global Horizontal Irradiance (GHI) and is located close to existing energy load centres in the Tete province.
Ncondezi intends to connect the project to the Mozambique grid targeting power off-takers in Mozambique and the Southern African Power Pool (SAPP).
The FS Study will take a modular design approach to the Solar Project allowing for greater flexibility including the potential for a scaled development programme of 30MW, 60MW, 100MW, 200MW and 300MW.
Complementing Mozambique’s development targets
The Solar Project is uniquely positioned to take advantage of existing advanced development work completed for the Ncondezi 300 MW thermal power plant that can be easily transitioned to the Solar Project. The Company estimates that in addition to reducing development costs, this has the potential to accelerate first power to the grid by 2024, using existing long lead time work streams already completed or at an advanced stage.Ncondezi believes this will reduce the development timetable by 6 to 12 months.
Pre-feasibility studies completed by NGP earlier in the year confirm significant potential value to shareholders with an estimated pre-money NPV of between US$60 million and US$65m, and fully diluted cash flows to NGP of between US$130m and US$180 million over 25 year period for a 300MW plant.
The Solar Project is aligned with Mozambique’s strategy to increase energy availability in a sustainable manner and promote new energy investments in the private sector. Following successful completion of the FS Study, NGP will work with Government authorities to attain the relevant permissions to build and operate the Solar Project.