(Ecofin Agency) - Intra Energy Corporation Ltd (IEC), producer and developer of thermal coal in Eastern Africa, has decided to joint-venture with Sinohydro Corporation Ltd to assess the development potential of its 200 MW coal-powered Ngaka plant, located at the tancoal mine in Tanzania.

Both groups signed a memorandum of understanding according to which they are to complete the feasibility study and financing proposals for the project, the Australian company said on November 30. “In Sinohydro we believe we now have the right partner to accelerate the project with the newly elected government of Tanzania,” said Intra Energy’s Chairman Graeme Robertson.

Ngaka project will use the high-quality thermal coal with low levels producing sulfur, produced at IEC’s tancoal mine subsidiary in the South-Western part of the country.

Tancoal is a joint-venture between IEC (70% interest) and government’s parastatal National Development Corporation (30% interest) who has 423 million tons of JORC coal resources.