JOHANNESBURG (miningweekly.com) - Africa-focused energy and resource company Kibo Mining has signed a memorandum of understanding (MoU) with the Tanzania Electric Supply Company (Tanesco) as a precursor to the finalisation of a power purchase agreement (PPA) for the Mbeya coal-to-power project (MCPP).
The PPA is expected to be finalised as early as the end of the first quarter of this year, in accordance with the timelines previously agreed with Tanesco and the Tanzania Ministry of Energy.
The MoU sets out clear guidelines, deliverables and timelines for the conclusion of the PPA, which will enable Aim- and JSE-listed Kibo to move towards the conclusion of the final development phase of the MCPP, which includes construction and commissioning.
Kibo on Wednesday said it hopes to complete funding arrangements for the construction and commissioning of the MCPP during the second half of this year. Kibo expects the project to be in production within 36 months thereafter, when first electricity into the grid is expected.
The MCPP is Kibo's flagship project and includes the construction of a 300 MW mine-mouth power station to alleviate the acute energy shortages in Tanzania.
"This is a seminal moment for Kibo as a signed MoU signals the official engagement by Tanesco and the Ministry in the formal implementation of the MCPP and moves us to just one step away from finalising the PPA," Kibo Mining CEO Louis Coetzee said.
This news follows a month of hard work by Kibo, which has made sure that all relevant stakeholders, especially development partners, will be ready and in place to immediately begin with this final critical phase of the PPA process.
"We will continue to work closely with all the relevant parties and remain positive that the Ministry will honour its commitment to deliver a signed PPA by the end of the first quarter," the company said.