Ncondezi Coal (LON:NCCL) said today detailed discussions to build its 300 megawatt (MW) power project in Tete, Mozambique will begin next quarter, once it receives the power framework agreement, a key milestone.
The company added it is making good progress with the Mozambican Ministry of Energy on the power framework agreement (PFA), which is on track for finalisation during the first half of 2013.
The PFA is the pre-cursor to a power generation licence and governs the commercial, technical, financial and legal structuring options for the Ncondezi power project.
The company added it has started the search for a contractor to build the power station and had appointed German group STEAG to conduct the pre-selection process.
Over 25 engineering firms have been invited to participate and submit indicative capital expenditure estimates and funding proposals.
Indicative proposals are expected during the second quarter of 2013, after which Ncondezi and STEAG will select a short list of preferred bidders who will be invited to submit binding, detailed bids during the second half of 2013.
The binding bids will play a key role in completing the Power Purchase Agreement (PPA) negotiations and project funding.
Ncondezi owns 100% of the Ncondezi Project and is developing a 300MW power plant and open pit mine to generate electricity for domestic consumption in Mozambique.
The company has proposed a name change to Ncondezi Energy.