Solgenics Ltd, a southern Africa-focused solar energy company, has announced an update on offtake discussions for its Tete Solar Project in Mozambique. The first phase of the renewable energy project involves the development of a 100 MWp solar plant along with a battery energy storage facility.
Solgenics has signed several non-disclosure agreements (NDAs) with potential power off-takers for the first phase of the project, demonstrating remarkable progress toward its development. The solar energy company has updated its project development program to deliver a bankable feasibility study (BFS), following the project feasibility study completed earlier this year.
The bankable feasibility study involves the completion of several key project work streams including the market sounding on power tariff key assumptions, signing of power purchase agreements (PPA) with off-takers, and power tariff approval of the off-taker. It also comprises the completion and Govt.’s approval of the environmental and social impact assessment (ESIA) studies of the solar project.
The estimated cost of the BFS will be around $1.5 million, which would be secured before the launching of any project workstreams. Solgenics has launched a funding strategy to secure the funding, focusing on non-dilutive mechanisms. The company targets project development loans from development finance institutions & private power developers and plans to select the funding partner in the second quarter of the year.
According to Hanno Pengilly, CEO of Solgenics, the BFS budget has been updated based on off-takers participation and will take around 9 to 12 months once the project financing is secured. The study will help increase confidence levels around the power tariff input assumptions.
Pengilly also added that Solgenics has entered a rousing stage of project development. The future solar project aims for a 25-year-long PPA. The power purchase agreement process will be delivered in a total of three phases, the first phase being the finalization of the project’s tariff.