In a statement Linc said the project was expected to provide the timely delivery of power into the Tanzanian electricity grid to support the growing demands on the Tanzanian Electricity Supply Company to meet the requirements of the local economy.

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 a 400MW power plant in the southwest of Tanzania in late 2017.

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.

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

The details of the JV arrangement will be negotiated over the coming months in accordance with the project delivery timeline outlined in the MOU.

The investment and operational experience gained from this first UCG project in Tanzania will cement the country as a regional leader in the adoption of clean coal technologies and power generation.

“This MOU reconfirms the potential for underground coal gasification to play an increasingly important role in the energy mix of southern Africa,” Linc Energy CEO and 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, as well as again demonstrating that Linc Energy’s ‘G5’ UCG technology is the world’s best.”

The signing of the MOU with Linc Energy and Olympic Exploration presents an opportunity for Tanzania to produce power from resources that would not have been tapped otherwise, according to NDC acting MD Mlingi Elisha Mkucha.

“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.