Kibo Mining and a Chinese firm Sepco III have agreed that $10.94-million is a fair reflection of the Mbeya coal-to-power project (MCPP) development costs over the past four years.
Upon the financial close of the MCPP, Sepco III will refund Kibo some 50%, or $5.49-million, of the final development cost incurred as part of the terms of the redefined agreement for the progression of the Tanzania-based project.
The agreement, which was signed in August, allowed Sepco III to earn the right to become the sole bidder for the engineering, procurement and construction (EPC) contract to build the power plant component of MCPP.
“We are very pleased with the outcome of this week’s meetings in China with Sepco III and General Electric (GE), as well as our MCPP advisers Tractebel Engineering.
“We are particularly pleased that we have reached agreement on the MCPP development costs and the balance of funds refundable to the company,” said Kibo CEO Louis Coetzee.
Kibo already received an advance of $1.8-million, with the total outstanding amount payable to Kibo now $3.67-million.
Kibo, Sepco III, Tractebel and GE have made significant progress towards finalising the EPC and original-equipment manufacturer (OEM) bid proposals for the power component of the MCPP.
“Progress in relation to the finalisation of the EPC and OEM bid proposals also exceeded our expectations and marks another major step forward in moving the MCPP towards financial close,” Coetzee said.