Last week, one of the proposed backers of the project, General Electric (GE), said it would “exit the new-build coal power market,” although its GE Steam Power business would carry on servicing existing coal facilities.
Ncondezi said it had not received any notice of change to the joint development agreement signed in July 2019 from GE Steam Power, which envisaged GE being Ncondezi’s technology partner on the project.
Ncondezi has held discussions with GE Steam Power and with the China Machinery Engineering Corporation (CMEC), the lead investor on the project, and told investors that in the event that GE does pull out, CMEC has a “plan B” option.
CMEC has compiled a preferred list of partners who are familiar with the project and has indicated that sealing a deal with a new technology partner would take about a month to complete if required.
“In the event that a new technology partner is required, CMEC is confident that a replacement can be put in place without impacting critical work streams such as the tariff negotiations and project financing. CMEC has strong relationships with the world’s leading technology partners in this sector, some of which have worked with Ncondezi in the past as part of previous EPC [engineering, procurement and construction] processes, and more recently to benchmark our current technology proposal,” said reiterated the company’s commitment to the project.
In the meantime, there is no change to the timeline for critical project work streams, including the historical cost audit and tariff negotiations, which are progressing positively.
“Having discussed GE’s announcement earlier this week with our partners, we remain confident that any potential impact on our project is not material to the project outcome,” said Hango Pengilly, the chief executive officer of Ncondezi.
“It is worth highlighting that the technology partner has no impact on the planned project financing. Work continues at pace across all our work streams and we look forward to providing further positive updates on the Project in the coming weeks,” Pangilly added.
Shares in Ncondezi were up 3.9% at 4p.