Intra Energy Corporation subsidiary in Tanzania, Intra Energy Tanzania (IETL) has inked a deal with TANESCO for the development of a net 120MW coal-fired power station near the Tancoal Mine in the Ngaka coalfields at Mbinga district, Ruvuma region, in the southwest Tanzania.

The Tancoal Mine, which commenced operations in August 2011, is owned by Tancoal Energy, a public private partnership with IEC at 70% and the National Development Corporation (NDC) of Tanzania with 30%.

Tancoal will deliver coal from a JORC quantified resource base of 251 million tons of which 400,000 tons per annum is to be supplied to the power station, expected to be located 9.6km from current mining operations.

The development of the 120 MW coal-fired power station is expected to deliver base load generation of more than 15% of Tanzania’s currently operating electricity supply.

The power generated will be supplied into the main grid by a TANESCO sponsored transmission system to Songea town, to replace diesel power generation.

IETL will sponsor the development of the power station project with Tancoal as the fuel supplier while the other parties will provide engineering and operational services.

A special purpose vehicle will also be established to finance, build, own and operate the power station, and will also include an 80 km transmission connection to Songea.

IETL, NDC and TANESCO will sign a power purchase agreement with subsequent financial closing for a targeted 2015 completion.