9th Oct 2009 10:00
IPSA Group PLC
("IPSA" or "the Company")
IPSA CLEAN COAL PROJECT LAUNCH WITH POWER PLANT SITE AGREEMENT AND START OF ENVIRONMENTAL APPROVAL PROCESS
IPSA Group PLC today announces that it has taken back ownership of 100 per cent. of Elitheni Clean Coal Holdings Limited ("ECCH") and has entered into an option agreement for the purchase of a site on which it intends to construct the first phase of its mine mouth power project in South Africa's Eastern Cape province.
On 28th November 2007 IPSA announced the sale of a 50 per cent. interest in ECCH (the "Sale Shares") to Exodus Africa LLC, for a premium of US$5 million. Receipt of the sale proceeds was secured by way of a first charge over the interest in ECCH. Following expiry of the agreed term and payment not being received, IPSA has exercised its rights and taken back ownership of the sale shares and ECCH is once again a wholly-owned subsidiary of IPSA.
ECCH has entered into the option agreement to purchase the land, which is adjacent to the Elitheni mine as well as abutting the railway line which runs from Indwe to East London. ECCH has appointed Savannah Environmental (Pty) Ltd to perform the initial phases of the environmental impact assessment work (the "EIA") Savannah Environmental (Pty) Ltd will commence the EIA in November. IPSA has identified potential suppliers of circulating fluidised bed boilers and turbines for the project. Funding for the equipment is expected to be provided under an export guarantee financing package.
IPSA intends to pursue the clean coal expansion at Indwe based on private power purchase agreements following the announcement by Eskom that it has put on hold its process for tendering Power Purchasing Agreements with independent power producers. With power shortages now being anticipated once more in South Africa from the end of 2009, IPSA is looking to come to agreement with large power users. Eskom has already announced the introduction of punitive tariffs of over ZAR 2,000 per MWh for users who fail to cut their consumption to 10 per cent. below their usage levels of 2008.
In total IPSA intends to develop up to 1,000 MW of clean coal power plant capacity throughout the Eastern Cape between East London and Port Elizabeth.
IPSA is the owner/operator of South Africa's first independent power plant (IPP), the Newcastle Cogeneration gas-fired power plant in KwaZulu Natal. The announcement of further coal fired expansion using state of the art circulating fluidised bed (CFB) technology has been taken against a background of worsening power shortages in South Africa.
For further information contact:
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Peter Earl, CEO, IPSA Group PLC: |
+44 (0)20 7793 5615 |
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Elizabeth Shaw, COO, IPSA Group PLC: |
+44 (0)20 7793 5615 |
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John Llewellyn-Lloyd / Sunil Sanikop, Noble & Company Ltd: |
+44 (0)20 7763 2200 |
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Dino Theodorou, PSG Capital (Pty.) Limited: |
+27 11 797 8400 |
or visit IPSA's website:
www.ipsagroup.co.uk
Related Shares:
IPSA.L