CHINA'S deep involvement in Mozambique continues with China Machinery Engineering Corporation (CMEC) signing an agreement to conduct a feasibility study for a thermal power plant in the northern province of Niassa.

According to a statement from government-owned utility Electricidade de Moçambique, on April 16 it signed a memorandum of understanding with CMEC that establishes the terms for the realisation of the feasibility study for the construction of the Cuamba Thermal Power Plant.

CMEC has now begun the study, which should take between eight and 10 months. After that a bidding competition for the construction of the new plant will be launched.

The memorandum was signed by administrator Carlos Yum, representing EDM, and Mario Qing from CMEC, in the presence of the president of the EDM Board of Directors, Mateus Magala, and the governor of Niassa, Arlindo Chilundo.

The power plant in Cuamba is part of the Government's Strategic Plan, which aims to increase energy production in the northern part of the country, which at present is overdependent on the Cahora Bassa hydroelectric power plant.

Governor Arlindo Chilundo said at the signing ceremony that the province would take advantage of the Strategic Plan, since Niassa has many natural resources, but lacks electricity infrastructure. Chilundo pointed out that about 17% of the population has access to electricity and pointed to the lack of energy to industrialize the province.

CMEC is also in final negotiations to develop and take a stake in another coal-fired power plant in Mozambique, this time in the northwest of the country.

Last November Ncondezi Energy Ltd, which is listed on the AIM segment for smaller faster growing companies at the London Stock Exchange, announced that it had signed a non-binding offer with CMEC and General Electric South Africa Ltd. The agreement was signed at a ceremony in Beijing.

Under the agreement, CMEC and General Electric are expected to acquire 60% of the power plant and lead the project financing. Financial close is expected in Q4 2018.

The companies are currently conducting final negotiations for a binding joint development agreement, as well as engineering, procurement and construction (EPC) and operations and maintenance (O&M) contracts for the development, construction and operation of the 300 MW integrated coal power and open pit mine project in Tete province. Negotiations will be exclusive until April 30 2018.

As well as EPC for the plant, the two companies will build a transmission line to connect the plant to the grid, which will be transferred to Electricidade de Moçambique on completion.

Ncondezi currently owns 100% of the Ncondezi Project. The company is developing an integrated thermal coal mine and power plant in phases of 300 MW, which could eventually grow to up to 1,800 MW.

China is also heavily involved in road, rail and bridge projects in Mozambique. A US$2.4 billion railway line between Moatize and Macuse will be built by a consortium comprising Portugal’s Mota-Engil construction group and the China Complete Engineering Corporation, a subsidiary of the China Machinery Engineering Corporation group.

And the Maputo-Catembe bridge is scheduled to open on June 25, the date of Mozambique’s independence in 1975. This bridge has been built by China Road and Bridge Corporation at a cost of around US$700 million, with the help of a loan from China Eximbank.

Maputo is in the far south of Mozambique. The bridge will be the largest suspension bridge in Africa, and a set of connecting roads will improve connectivity with South Africa.