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Edenville, Sinohydro forge partnership to develop Rukwa project

Edenville Energy Plc on Jan. 23 said it signed a memorandum of understanding with China's Sinohydro Corp., giving the companies an 18-month exclusivity period to work together on Edenville's Rukwa coal-to-power project in Tanzania.

Sinohydro previously committed time and resources to the project and carried out extensive review work on Rukwa in the second half of 2016, along with the completion of a technical proposal and an independent financial model.

The MOU defines basic terms for a strategic partnership between the companies, with a view to proceed with a formal joint development or joint venture contract and make Sinohydro the engineering, procurement and construction contractor for the Rukwa project.

Under the MOU, Edenville and Sinohydro will complete predevelopment tasks according to each company's relevant experience and specialization.

Sinohydro will complete a bankable feasibility study for the power plant project, with study-related costs estimated at US$1 million, and will help assess available funding options for construction. Edenville will be responsible for the continued development of the coal mine, along with the permitting and legal requirements to advance the power plant to construction.

Should the MOU not proceed to a legally binding development agreement and the bankable feasibility study is subsequently used by Edenville with another partner, the miner will be mandated to reimburse Sinohydro's costs for the study.

Edenville noted that it will retain its ownership rights and control over the project throughout the 18-month MOU period. The company recently started trial mining at Rukwa, with initial production targeted later this quarter.