Appointment of Solar Project Advisors
22/12/2022 07:00
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RNS Number : 5310K Ncondezi Energy Limited 22 December 2022
News Release
Appointment of Solar Project Advisors
22 December 2022: Ncondezi Energy Limited ("Ncondezi" or the "Company") (AIM:
NCCL) has signed a Master Services Agreement ("MSA") with Synergy Consulting
("Synergy") to provide financial and transaction advisory services (the
"Services") to the Group for the 300MW solar photovoltaic ("PV") and Battery
Energy Storage System ("BESS") project in Tete, Mozambique (the "Solar
Project").
Highlights:
· MSA covers potential advisory services to accelerate the Solar
Project's delivery up to Financial Close, including:
o finalisation power tariff with potential offtakers;
o finalisation of key agreements;
o negotiations with Project lenders for debt financing; and
o capital raising for Ncondezi's equity contribution towards the Solar
Project at Financial Close
· Synergy is a leading global power financial services provider
that has successfully achieved financial close on over US$70bn of projects
with significant experience in Mozambique supporting the county's largest
energy projects in recent years
· Synergy is familiar with Ncondezi and the Solar Project having
acted as financial advisor on various mandates for the Company since 2016
· Services also include potential due diligence and capital raising
support for additional expansion renewable energy projects
· MSA structure provides flexibility for Ncondezi to approach each
work stream and applicable fee on a case-by-case basis within a capped fee
structure
Ncondezi Chief Executive Officer, Hanno Pengilly said: "As we continue to make
good progress on our 300MW solar PV project, Synergy's appointment ensures
access to world class resources to achieve the next set of development goals
and further enhance the Company's value proposition. Synergy is well placed to
assist the Company having worked closely on the Solar Project since inception
as well as being involved in some of the largest delivered and under
development power projects in Mozambique. Services provided will require
approval by the Company on a workstream-by-workstream basis allowing the
Company to efficiently manage cashflows.
With the Solar Project feasibility study in near final form including an
advanced form competitive tariff proposal, the Company has initiated power
offtake discussions with potential offtakers and submitted its preferred
transmission connection to supply power to the grid for approval with the
relevant local authorities. We look forward to providing updates on these work
streams during Q1."
Project Financial Advisor
Synergy is an international financial advisory services company that has
successfully achieved financial closure on more than $70bn worth of
competitively tendered projects in over 70 countries globally. Synergy has
extensive experience advising on a number of projects in Mozambique including
solar, gas and hydro projects. This includes advisory services to Ncondezi,
where Synergy has acted as financial advisor to the Company on various
mandates since 2016.
The Master Services Agreement with Synergy includes a list of financial and
transaction advisory workstreams which it may provide to the Company and
covers the full scope of potential services required to achieve Financial
Close. The Services will be agreed on a per workstream basis with success fees
agreed that are linked to achieving set milestones. The Company is not obliged
to use Synergy for any specific workstream and total fees have been capped.
Synergy's key potential responsibilities include:
· Updating of key Project studies;
· Ongoing optimisation and updating of the Project financial model;
· Finalisation of tariff negotiations with potential offtakers;
· Finalisation of key Project agreements - Power Purchase
Agreement, Power Concession Agreement, EPC and O&M agreements;
· Discussions with Lenders and Finalization of Finance Documents;
and
· Raising capital for Ncondezi's equity contribution for the
Project at Financial Close.
In addition to the main Solar Project, the Master Services Agreement also
includes the provision of advisory and capital raising services for potential
expansion projects in the renewable energy sector.
Fee structure:
The Company has agreed a capped fee structure for any financial and
transaction advisory services for the Solar Project under the MSA. The capped
fees have been balanced between an hourly charge out rate and success fees.
The maximum payable under the hourly charge out rate structure will be
US$602,240 for any Services approved by Ncondezi.
In addition, a 0.35% success fee will be payable on any debt raised for the
Solar Project and the success fee for such debt will be capped at US$600,000
and will only be payable at Financial Close.
In relation to potential expansion projects, a capped fee has also been
balanced between an hourly charge out rate and success fees. The maximum
amount payable under the hourly rate structure will be US$480,000 for any
Services approved by Ncondezi. In addition, a 0.35% success fee will be
payable on any debt raised and the success fee is capped at US$180,810. In
addition Synergy will be entitled to a 1.0% equity raise fee on any equity
raised from a Synergy introduced investor with such fees being capped at
US$172,200 and is payable if any expansion project achieves Financial Close.
Related Party Transaction
By virtue of the fact that Aman Sachdeva, a director of the Company, is also a
director, founder and majority shareholder of Synergy, the MSA constitutes a
related party transaction for the purposes of AIM Rule 13. Accordingly, the
Company's Directors, with the exception of Aman Sachdeva, consider, having
consulted with Liberum Capital Limited, the Company's Nominated Adviser, the
terms of the MSA to be fair and reasonable insofar as the Company's
shareholders are concerned.
Enquiries
For further information please visit www.ncondezienergy.com or contact:
Ncondezi Energy: Hanno Pengilly +27 (0) 71 362 3566
Scott Mathieson, Edward Thomas, Kane Collings +44 (0) 20 3100 2000
Liberum Capital Limited:
NOMAD & Joint Broker
Novum Securities Limited Colin Rowbury +44 (0) 20 7399 9427
Joint Broker
Elizabeth Johnson +44 (0) 777 56 55 927
Pimlico Advisory Ltd
Investor Relations
About Ncondezi Energy
Ncondezi is an African power development company focused on the development of
renewable and baseload energy solutions at its concession located in the Tete
Province, northern Mozambique.
The Company is focused on providing reliable and affordable energy to
Mozambique to meet growing energy demands. Our projects support 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. Our projects would provide reliable and available power helping to close
the infrastructure gap of the region and serving as a catalyst for economic
development.
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