Ncondezi surges on start of Tete solar study

15th Jul 2022 14:03

(Sharecast News) - Ncondezi Energy updated the market on its solar photovoltaic and battery energy storage system (BESS) project in Tete, Mozambique on Friday, which is being carried out through its wholly-owned subsidiary Ncondezi Green Power Holding (NGP).

The AIM-traded firm said NGP was launching a feasibility study for the up-to-300MW solar power plant plus BESS, which would require about four months to complete, and would be led by WSP Group Africa.

It said the solar project would be located within its concession area, with three preferred sites of 500MW generation potential each already identified.

The solar project was "uniquely positioned" to fast-track first power to the grid as early as 2024, the board claimed, leveraging existing advanced stage development work.

It said the project had an estimated pre-money net present value of between $60m and $65m, and fully-diluted cash flows of between $130m and $180m over a 25-year period.

All Mozambique permissions and approvals had been received to commission the study, which was expected to be funded through available capital following completion of the Seritza working capital facility term loan restructuring.

The company said its working capital position had been extended to October, subject to the successful completion of the restructuring and taking into account the working capital requirements of the study.

"The board has taken the decision to launch the feasibility study for up to 300MW solar photovoltaic plus BESS, and appoint one of the top technical consultants in solar, WSP, to deliver it," said chief executive officer Hanno Pengilly.

"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."

Pengilly said the project was "uniquely positioned" to leverage existing advanced-stage development work from the company's 300MW thermal power project, which was expected to "significantly cut" development costs and accelerate project delivery.

"Ncondezi expects the study to take approximately four 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."

At 1345 BST, shares in Ncondezi Energy were up 80.65% at 1.4p.

Reporting by Josh White at Sharecast.com.