Solar Project FS Launched with target NPV $60m
15/07/2022 07:00
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RNS Number : 5698S Ncondezi Energy Limited 15 July 2022
News Release
Solar Project FS Launched with target NPV $60m
15 July 2022: Ncondezi Energy Limited ("Ncondezi" or the "Company") (AIM:NCCL)
provides an update on its solar photovoltaic ("PV") and Battery Energy Storage
System ("BESS") project in Tete, Mozambique (the "Solar Project") being
carried out through its wholly owned green energy subsidiary, Ncondezi Green
Power Holding Ltd ("NGP").
Highlights:
· NGP launches feasibility study for up to 300MW solar PV power
plant plus BESS ("FS Study")
· FS Study requires approximately 4 months to complete and will be
led by WSP Group Africa (Pty) Ltd ("WSP")
· Solar Project to be located within Ncondezi concession area with
3 preferred sites of c.500MW generation potential each already identified
· Solar Project uniquely positioned to fast track first power to
the grid as early as 2024, leveraging existing advanced stage development work
· Estimated pre-money NPV of between US$60m and US$65m and fully
diluted cash flows of between US$130m and US$180m over 25 year period
· All Mozambique permissions and approvals received to commission
FS Study
· FS Study expected to be funded through available capital
following completion of the Seritza Limited ("Seritza") working capital
facility term loan restructuring ("Restructuring")
· Working capital position extended to October 2022 subject to the
successful completion of the Restructuring and taking into account the working
capital requirements of the FS Study
Ncondezi Chief Executive Officer, Hanno Pengilly said: "The Board has taken
the decision to launch the FS Study for up to 300MW solar PV plus BESS and
appoint one of the top technical consultants in solar PV, WSP, to deliver it.
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. 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. Ncondezi expects
the FS Study to take approximately 4 months to complete. Initial financial
projections for the Solar Project indicate significant value upside, and we
expect it to attract a broad range of investors.
We look forward to providing additional updates in the near future."
Overview of the Solar Project
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. 3 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.
It is the intention that the Solar Project will connect to the Mozambique grid
with target 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.
The Solar Project is uniquely positioned to take advantage of existing
advanced development work completed for the Ncondezi 300MW 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. The Company 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$60m and US$65m, and fully diluted cash flows to NGP of between
US$130m and US$180m over 25 year period for a 300MW plant.
NGP has identified WSP, one of the world's leading engineering professional
services consulting firms, to lead the FS Study. The Company believes that WSP
is well positioned to deliver the FS Study as it has delivered many renewable
energy projects in Africa and has unique experience relevant to the Solar
Project including leading the Company's thermal project feasibility study as
well as other grid scale solar PV projects in Mozambique.
The Company intends to launch the FS Study once the Seritza Restructuring has
been completed. Following completion of the Seritza Restructuring and taking
into account the working capital requirements of the FS Study, the Company
expects to be funded to October 2022.
NGP has engaged the relevant Mozambique Government authorities throughout the
Solar Project development process and received the prerequisite support to
launch the FS Study. 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.
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
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018. Upon publication of this
Announcement and such information is now considered to be in the public
domain. The person who arranged for the release of this announcement on behalf
of the Company was Hanno Pengilly.
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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