LINC Energy has set its sights on the development of a 400 megawatt underground coal gasification (UCG) to power operation in Tanzania.

The company recently entered into a memorandum of understanding (MOU) with the National Development Corporation (NDC) of Tanzania and Olympic Exploration.

The MoU specifies a program of coal exploration and power plant development, which subject to project permitting and commercial term development, would see the commercialisation of the power plant in the South West of Tanzania in late 2017.

The project is anticipated to provide a much needed and timely delivery of power into the Tanzanian electricity grid to support the growing demands on the Tanzanian Electricity Supply Company Limited (TANESCO).

Under the MOU, the NDC has agreed to work with Linc Energy and Olympic Exploration to obtain all necessary permits and approvals for the project, while also assisting with the securing of land access, utilities and the development of a long-term power purchase agreement (PPA).

Olympic Exploration has access to vast coal resources in Tanzania and will be working with Linc Energy on all of the necessary exploration, feasibility studies, finance raising, project engineering, delivery and operation under a future joint venture between the parties.

The details of the JV will be negotiated over the coming months.

“This MOU reconfirms the potential for underground coal gasification to play an increasingly important role in the energy mix of southern Africa,” Linc Energy managing director Peter Bond said.

“We are delighted to be partnering with the Tanzanian Government and Olympic Exploration in this exciting project which not only acts as a further catalyst for the commercialisation of UCG in Africa, but also affords significant economic and regional benefits to the people of Tanzania.”

NDC acting managing director Mlingi Elisha Mkucha said the signing of the MoU presented an opportunity for Tanzania to produce power from resources that would otherwise stay untapped.

“Linc Energy’s technology will allow power production in the remotest areas of Tanzania, which currently have limited grid connectivity, and thus enhance economic activities in these areas and contribute significantly towards the reduction of household poverty,” he said.