Kibo Mining Plc signed a memorandum of understanding with the Tanzania Electric Supply Co. for a power purchase agreement for its flagship 300-MW Mbeya coal-to-power project.

The project comprises the development of the Mbeya coal mine, a 1.5-million-tonnes-per-year mining operation, and the Mbeya power plant, a 300-MW mine-mouth thermal power station.

In early January, Tanzania's Ministry of Energy called a meeting with the company and Tanzania Electric Supply to finalize the MOU. The company noted at the time that the Tanzanian government is focused on delivering 5 GW of installed generation capacity by 2020, with another 7 GW to be added in the subsequent five-year period.

Kibo Mining said Feb. 14 that it expects the agreement to be finalized by the end of the first quarter.

The company aims to secure funding arrangements in the second half of 2018 for construction and commissioning of the mine-mouth power station, after which production is anticipated within 36 months.