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AIM coal company Ncondezi looks to renewables

Ncondezi Energy (AIM:NCCL) has spent years developing a coal mine and power plant in Mozambique but now says “significant market demand cost effective and reliable power” had led it to a solar and battery storage investment.
AIM coal company Ncondezi looks to renewables AIM coal company Ncondezi looks to renewables AIM coal company Ncondezi looks to renewables AIM coal company Ncondezi looks to renewables AIM coal company Ncondezi looks to renewables

Solar's industrial applications are growing thanks to better storage options

Ncondezi will put around US$1.5 million into the sector through a joint venture, funded with $2.48 million placing and subscription in London.

The company said the JV with GridX was complementary to its eponymous coal project.

"The company … believes the move into the [commercial and industrial] solar and battery storage sector represents a significant opportunity for the company to complement its existing large scale baseload power project and access near-term low-risk annuity income streams which the company believes has significant growth potential," chairman Michael Howarth said.

"Falling solar panel and battery costs are setting the foundation for a tide of disruptive technology in the African energy markets, allowing African countries to leapfrog to the next generation of sustainable energy supply."

The $1.5 million spend is split between the $390,000 JV payment to GridX and the expected $1.1 million share of the first project.

Ncondezi said GridX's projects had average IRRs of 10-15%.

While the first project was not named in the announcement, the company said GridX had a few to choose from.

"Potential pipeline projects include luxury resorts, manufacturing facilities, port facilities and agri-businesses, with flexible design solutions for either off grid or on grid requirements," Ncondezi said.

"The advanced stage projects have a potential 1.4MWp of solar and 8.9MWh of battery storage, and are concentrated in Mozambique, Djibouti and Zambia."

Ncondezi's share price was down 7.95% on the news to 6.95p (US9.1c).