UK-based energy and mining company Edenville Energy (AIM:EDL) has recently received several technical and financial proposals for the construction of a 120–135MW power plant at the Rukwa Coal to Power Project site in south-western Tanzania.
Edenville has received proposals from major international Engineering, Procurement and Construction (EPC) groups, including China-based Runh Power.
However, Edenville has not tied itself to a particular group yet in order to draw on the knowledge and experience of different groups before finalizing the most appropriate deal.
The company also notes that differences in EPC costs between various proposals have been significant.
“Considerable cost savings have been identified which could potentially be applied to the construction and operation of the power plant and particularly, options for plant acquisition could result in a material reduction of overall project costs.
These proposals mean that the Company will be able to select the most financially viable route to construct the power plant project whilst also meeting the requirements of the Tanzanian Government,” Edenville indicates.
Edenville also notes that the Rukwa project has recently gone through extensive review by the Tanzanian authorities; the company is now awaiting further directives from senior Tanzanian government representatives on how they wish to proceed with the power development.
Rukwa Coalfields Project
At the beginning of 2016, Edenville Energy was granted with a mining license by Tanzania’s Ministry of Energy and Minerals (MEM) to develop its Rukwa coalfields project in the country’s south western region.
“Whilst the Company’s Rukwa coal resource could support a larger power plant it is currently envisaged that a plant in this range [120–135MW] will be the best option to establish power generation in the shortest possible timescale,” Edenville indicates.
Tanzania currently generates less than 1% of its total installed capacity of 1,754MW from coal-fired power plants that are fully supplied by imported coal according to the African Development Bank (AfDB).
In 2013 Tanzania imported USD1.35m of coal briquettes to supply its coal-fired power plants, mostly from Malawi, accounting for 86% of the total imported according to the Massachusetts Institute of Technology (MIT).
According to Edenville, the Rukwa Coalfields could potentially help diversify Tanzania’s energy feedstock in partnership with a power provider.