Ncondezi Energy Ltd (LON:NCCL) said contractors have been instructed to get ready to start accelerated development works at its 300 megawatt (MW) coal-fired power project and coal mine and that a third-party study on the Mozambique power market will be submitted in coming weeks.

In order to proceed, an early development works budget has been agreed with lead strategic partner China Machinery Engineering Corporation (CMEC).

READ: Ncondezi submits historical cost audit for Mozambique power project

Once this budget is signed off by CMEC, Ncondezi said the Chinese company will advance funds to the operating subsidiary in return for which Ncdondezi will pledge shares in the subsidiary as security for the repayment of the sums, as agreed in July last year.

The company is also reviewing an advanced draft of the third-party power market outlook study and said it was “on track to submit this month”, following updates on national generation planning from the Mozambique government last month.

Ncdondezi said it updated feasibility study is expected to be submitted at the same time. 

“As part of our financing strategy to advance the Ncondezi Project we have been in discussions around our financing options and this is a key step forward towards those goals and to ensure that we can continue to advance the project while the tariff negotiations are underway,” said Hanno Pengilly, Ncondezi’s chief executive officer.

“Contractors have now been instructed on the early works and we expect to be able to update the market further in due course.”

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