The Benga joint venture plans to fully acquire the Benga Power Plant (BPP), which is under construction in Mozambique, through the purchase of Elgas SARL's 50% interest in the project.
The BPP is jointly owned by Benga Joint Venture and Elgas.
The two firms have agreed that the Benga joint venture, which comprises Riversdale with a 65% stake and Tata with a 35% stake, has the resources to accelerate development of the BPP.
Full control of the BPP will speed up the development of the project, enable Riversdale to secure value and will facilitate introduction of strategic equity investors who will develop the project.
The $1bn power project is moving towards initial production in 2013 / 14 with phase 1 to produce 500-600MW of power followed by an expansion of up to 2,000MW in line with the proposed development of the Mozambique Backbone Transmission Project.
Power generated in phase 1 will be supplied to South Africa through the existing 220MW transmission infrastructure to Riversdale's Benga and Zambeze projects and to the domestic power network.
Coal for the power station will be supplied by the Benga Coal Project currently in development and is scheduled to be producing first coal in the third quarter of 2011.
Riversdale has undertaken advanced discussions with shortlisted EPC suppliers and power offtakers for the BPP.
Discussions with key strategic equity investors are underway with final negotiations expected to conclude during March 2011.