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AFC invests in Ncondezi Energy’s 300 MW Power Plant in Mozambique

Ncondezi Energy Limited ("Ncondezi" or the “Company”) (AIM: NCCL) has conditionally raised c. £[3.19] million (US$[5] million), for a 300MW power plant project located near Tete, in northern Mozambique, by way of a conditional placing (the “Placing”) of new Ordinary Shares in the Company (the "Placing Shares") to Africa Finance Corporation (“AFC”). AFC is an African-led multilateral development financial institution with significant experience of investing in African power and infrastructure projects. In September 2014 the Company announced that it had reached a conditional co mmercial deal with Electricidade de Mozambique ("ED M") on the sale of electricity from the Ncondezi Project. The agreed commercial deal includes the range for the starting electricity tariff to be paid by EDM, which will then be subject to adjustments during the 25 year operational life of the Project. The starting tariff range is based on a number of assumptions including indexation, financing costs, coal costs, operator and maintenance costs and the technical parameters and capital costs contained in the binding Power Plant EPC bids. Based on a target project capital structure of 70% debt and 30% equity the Company believes that the conditional commercial deal supports the economics of the Ncondezi Power Plant. Ncondezi has been working to satisfy the conditions precedent and agree with EDM an indicative timetable to Financial close, now targeted for Q1 2016. In October 2014, the Company announced that it had entered into a non-binding MOU with Shanghai Electric Power Company Limited ("SEP"), which may lead to SEP becoming a controlling shareholder in the Ncondezi Power Project and a minority shareholding in the Ncondezi Mine Project. SEP is a leading subsidiary of China Power Investment Corporation ("CPI") which has total installed capacity of 90,000 MW and is one of the largest power companies in the Peoples' Republic of China. A deal with SEP has the potential to provide the Company, and all stakeholders in the Ncondezi Project, with the opportunity to partner with a major power generation company and potentially fast track the timetable to Financial close. SEP has undertaken a detailed due diligence process in relation to the Company that started in December 2013 and the Company continues to make good progress with SEP in relation to finalising their outstanding due diligence items. A binding agreement with SEP is now targeted for Q1 2015. In October 201 4, the Company received a number of binding bids for the engineerin g, procurement and construction ("EPC" ) contract for the 92 km transmission line and substa tions to connect the Ncondezi Project to the Mozambican Northern Grid. Ncondezi and its technical and commercial advisors are currently evaluating the bids. In addition, the Company recently completed and submitted its transmission Environmental and Social Impact Assessment ("ESIA") study to the Mozambican Ministry for Coordination of Environmental Action ("MICOA") for approval. In November 2014, the Company received its land use agreement, or DUAT in Mozambique, from the Mozambican Government granting exclusive use for power plant operations. The DUAT covers an area of 9500 hectares. Ncondezi Energy owns 100% of the Ncondezi Project which is strategically located in the power generating hub of the country, the Tete Province in northern Mozambique. The Company is developing an integrated thermal coal mine and power plant in phases of 300MW up to 1,800MW.The first 300MW phase is targeting domestic consumption in Moza- mbique using reinforced existing transmission capacity to meet current demand. The Company intends to use the net proceeds of the Placing and any funds raised by way of the planned Open Offer to discharge certain near-term payment obligations in respect of the on-going development of the Ncondezi Project and to ensure that the Company is adequately funded into Q3 next year whilst it works to complete the strategic partner process, as well as to cover general working capital requirements and select development work streams. Commenting on the Placing, Paul Venter, Chief Executive Officer of Ncondezi said: “We are delighted that Africa Finance Corporation has become a shareholder in Ncondezi. AFC have significant expertise of investing in African Power and Infrastructure Projects and we look forward to working with them to continue the development of the Ncondezi Project.” Andrew Alli, President & Chief Executive Officer AFC commenting on the groundbreaking partnership said “ AFC is delighted to provide not only access to finance, deal structuring and sector technical expertise, but also advisory services, project development capacity and funding to bridge the power infrastructure investment and access deficit, a critical pillar for economic growth across Africa”. Notes to Editors Enquiries: For further information please visit www.ncondezienergy.com About AFC - www.africafc.org Follow us on Twitter - @africa_finance Africa Finance Corporation (AFC) is an African-led multilateral development financial institution, established in 2007, with a mission to improve African economies by proactively developing and financing infrastructure, industrial and financial assets. AFC is involved as an investor, developer and financier of various infrastructure projects, and is gaining recognition as the benchmark institution for financing the development of infrastructure projects in Africa. AFC’s current authorized share capital is US$2.0 billion with shareholders’ funds of US$1.28 billion and a 2014 funding program of over US$1 billion. AFC is the second highest investment grade-rated multilateral financial institution on the African continent, with an A3 (long term) /P2 (short term) foreign currency debt rating by Moody’s Investors Service. About AFC: • AFC is involved as an investor, developer and financier of various infrastructure projects, and is gaining recognition as the benchmark institution for financing the development of infrastructure projects in Africa. • AFC’s current authorized share capital is USD2.0 billion with shareholders’ funds of USD1.28 billion and a 2014 funding programme in excess of USD900 million . • AFC is one of the highest investment grade-rated multilateral finance institutions on the African continent, with an A3 (long term) /P2 (short term) foreign currency debt rating by Moody’s Investors Service. AFC’s projects: • Cenpower Generation Company Limited (‘Cenpower’) is a special purpose vehicle that is developing a 350MW, light crude oil and gas fired, combined cycle power plant in the municipality of Kpone within the Tema industrial zone, near Accra, Ghana (‘the Kpone IPP’). The Kpone IPP is one of the largest infrastructure projects currently under development in West Africa. A well-developed project with a very robust commercial structure, Kpone enjoys the strong support of the Ghanaian Government. The key commercial agreements, including the Power Purchase Agreement and the Government Consent and Support Agreement, have been approved by Cabinet and Parliament. • AFC is a partner with Vigeo Holdings Limited and Tata Power Delhi Distribution Limited for the acquisition of power distribution assets, and a lead financier in the acquisitions of the Kainji and Ughelli power generation plants in the current Nigerian Government power sector privatisation round. • AFC is the lead investor in the award winning Cabeolica project, a USD90 million, 26MW landmark renewable energy wind power project in Cape Verde. • AFC is the Technical Adviser to the Central Bank of Nigeria (CBN) on the CBN’s USD2.0 billion Power and Aviation Intervention Fund (PAIF). • AFC is the lead investor in the Main One fibre optic cable project, enhancing West Africa’s connection to Europe and the rest of the world through faster and more technologically advanced broadband capacity. • AFC provided a USD50 million convertible debt investment in ARM Cement Limited (ARM), the second largest cement operator in Kenya to support expansion initiatives across Eastern and Southern Africa including; development and construction of a lime plant in Tanzania and expansion of ARM’s cement capacity in Kenya. The transaction marked AFC’s first bilateral investment in Kenya. • AFC provided financing for Ethiopian airlines fleet expansion in the acquisition of Africa’s first Boeing 777 airline. • AFC also invested in the Bakwena toll road project in South Africa, and in the EURO 270 million Konan Bedie Toll Bridge in Côte d’Ivoire; the signature Transport PPP project in Francophone Africa, underscoring its interest in investing in PPPs/PFIs in its focal sectors across the African continent. • AFC launched a landmark USD15 million project development facility with the Dutch Development Bank FMO in January 2013, to fund early-stage equity investments in projects under development pre-financial close, in the infrastructure sector across sub-Saharan Africa. • The AFC has established partnerships with national, regional and international organizations and with sponsors that are active in the infrastructure space in Africa.

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