Finance

Mozambique: The African Development Bank provides $2.5 million to increase penetration of renewable energy

Friday, 14 October 2022 15:09
Chicamba Dam Chicamba Dam

(AFBD) - The Board of Directors of the African Development Bank (AfDB) has approved a grant of a grant of $2.5 million to the Mozambican government to develop renewable energy resources.

The grant, from the Sustainable Energy Fund for Africa (SEFA), administered by the Bank, will be used to implement the Mozambique Renewable Energy Integration Program (MREP).

"With the support of the Sustainable Energy Fund for Africa, Mozambique’s capacity to integrate larger shares of variable renewables will increase its efforts to become a major regional electricity supplier," said Dr. Daniel Schroth, Director of the African Development Bank's Renewable Energy and Energy Efficiency Department. He added, "Given that Mozambique is one of the most highly climate-vulnerable countries in the world, the project will help build a more sustainable and resilient power generation infrastructure."

The funding will assist the national electricity company to provide financial support for technical, economic, environmental and social feasibility studies for the development of a solar floating power plant in Chicamba reservoir. In addition, it will support funding for a feasibility study for Energy Battery Systems Storage in up to 10 sites, as well as capacity building for EDM´s personnel; and support for tender preparation.

“We are very excited to launch the activities under the Sustainable Energy Fund for Africa in Mozambique, which comes with a set of very strategic and innovative projects, that will contribute to diversify the energy matrix ad fund a study on storage needs, that will enable the development of more renewable energy projects,” said Marcelino Gildo Alberto, Chairman of EDM, the beneficiary. “The support under SEFA also includes a robust capacity building program, that will enable our personnel to develop strategic skills related to the development and management of renewable energy projects,” he added.

The donation will also be used to conduct studies to increase the share of variable renewable energy production in Mozambique's energy mix. Feasibility studies to develop floating photovoltaic solar energy will be conducted in existing EDM hydropower assets.

Increasingly affected by severe and sudden cyclones, storms, and prolonged drought periods, Mozambique is endowed with abundant energy from renewable and fossil resources. Over the last decade, the energy sector in Mozambique has made considerable progress: the country is a net exporter of electricity despite low access rates (57% in urban areas and 13% in rural areas). With 187 gigawatts, Mozambique has the most significant power generation potential in southern Africa, thanks to untapped resources in coal, hydroelectricity, gas, wind, and solar energy. Hydropower currently accounts for about 81% of installed capacity. But natural gas and renewable energy sources are set to take a growing share of Mozambique's energy mix.

The African Development Bank is a key player in the energy sector in Mozambique. It provided more than $400 million in financing for the ongoing $20 billion Mozambique Liquefied Natural Gas (LNG) Project. The Bank supports power generation, transmission and distribution, such as the Tamine Gas Project. It is currently supporting the Mphanda Nkuwa hydroelectric power station project, the rehabilitation of the Cahora Bassa hydroelectric power station and the construction of a transmission line from the north to carry electricity to the South.

ABOUT SEFA

SEFA is a multi-donor special fund that aims to unlock private sector investments that contribute to providing universal access to affordable, reliable, sustainable, and modern energy services for all in Africa, in line with the Bank’s New Deal on Energy for Africa strategy and Sustainable Development Goal 7. For more information: www.afdb.org/sefa

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