Linc Energy has signed a memorandum of understanding (MoU) with National Development Corporation (NDC) of Tanzania and Olympic Exploration for an underground coal gasification (UCG) project in Tanzania.
The MoU calls for the development of 400MW power generation from UCG syngas by 2017 to provide power to the Tanzanian electricity grid.
The project will support the growing demands on the Tanzanian Electricity Supply Company (TANESCO) to meet the requirements of the economy.
Under the MoU, Linc Energy will carry out a programme of coal exploration and power plant development, which would see the project up and running by late 2017.
The NDC will work together with Linc Energy and Olympic Exploration to obtain all the necessary approvals for the project, while helping to secure land access, utilities and the development of a long-term power purchase agreement.
Linc Energy CEO and managing director Peter Bond said: "This MoU reconfirms the potential for underground coal gasification to play an increasingly important role in the energy mix of southern Africa."
NDC acting managing director Mlingi Elisha Mkucha said: "The signing of this MoU with Linc Energy and Olympic Exploration presents an excellent opportunity for Tanzania to produce power from resources that would otherwise have not been tapped.
"Linc Energy's technology will allow power production in the remotest areas of Tanzania, which currently have limited grid connectivity, and therefore enhance economic activities in these areas and contribute significantly towards the reduction of household poverty."