Chinese company Shanghai Electric Power is investing US$25.5 million to develop a coal-fired power project in Tete, Mozambique, in partnership with London-listed Ncondezi Energy group.

The Chinese firm will in return get a 60-percent stake in the project.

The investment by Shanghai Electric Power will be funded “into a newly incorporated holding company… which will be used to fund all development costs of the power project,” Ncondezi Energy said in a statement released earlier this week.

Ncondezi Energy added that the joint development agreement with Shanghai Electric Power referred only to the 300MW coal-fired power project in Tete.