exxaro coal
Feature image credit: Wikimedia

Kibo Mining has awarded Sepco III the second lot of the engineering, procurement and construction contract for the construction of the power line that will evacuate power from the Mbeya Power Plant in the Songwe District to the TANESCO Mbeya sub-station.

Originating from the past four weeks’ intensive engagement with the Tanzania Electricity Supply company (TANESCO), on the development of a Power Purchase Agreement (PPA) for the Mbeya Coal to Power Project (MCPP), Kibo Mining met with Sepco III at their Qingdao corporate headquarters to:

  • Update Sepco III on progress with PPA negotiations
  • Re-validate the existing EPC contract price for MCPP
  • Integrate and align PPA technical requirements with EPC-contract provisions; and
  • Discuss broader project development co-operation with the objective to expand the existing co-operation agreement to, among other matters, also include the Kibo Minings Mabesekwa project in Botswana.

During the above referred meetings, the Kibo Mining and Sepco III also decided that sufficient progress has been made with the PPA discussions and that it would be prudent to sign Lot 2 of the EPC-contract with Sepco III.

The power line construction contract is the second lot of the EPC contractual work as
outlined in the announcement dated 29 August 2017.

Kibo Mining has a longstanding relationship with Chinese company Sepco III for the development of the Mbeya Coal to Power Plant that is of key strategic importance in reducing Tanzania’s critical power deficit.

“We are delighted to continue working with Sepco III as our designated EPC partner,” comments Kibo Mining CEO Louis Coetzee.

“The signing of this second lot of the EPC is the conclusion of discussions with Sepco III that occurred last week in China, during which several strategic decisions were taken
with regard to the further development of the MCPP as well as our future strategic co-operation with Sepco III.

“Together with all our development partners we are working all hours to complete the PPA as soon as possible.

“Over the past few weeks we have once again been reminded of the significant importance of the MCPP, both as a strategic energy project as well as a socio-economic development project, and how critically important it is to spend enough time to make sure that we get it right the first time.

“The PPA process is in a very sensitive phase of its development and this requires the utmost patience, consideration and discretion from all stakeholders,” he continues.