Mozambique pushes for investments to bolster energy mix

The energy sector in Mozambique has been driven largely by hydropower, thanks to the country’s 2,075 MW Cahora Bassa dam, one of the largest on the continent that feeds both Mozambique and South Africa.

But despite serving as a major hub for hydropower in southern Africa, only 31% of Mozambique’s citizens have access to electricity, according to the latest SDG 7 Energy Progress Report.

With a huge gap existing between power supply from the grid and demand for power from consumers, there’s a strong case to develop existing and new infrastructure to close the energy deficit.

As a result, Mozambique is pushing for investments to drive energy access, with a focus on expanding its capacity in clean sources of power generation.

The push for investments is yielding fruits. The country already has made some progress with major projects capable of bolstering the mix and capacity of its energy generation. What are some of these megaprojects?

Cahora Bassa hydroelectric scheme

While Mozambique works to expand its energy mix, it is not holding back on consolidating its gains in hydropower, a major source of grid power for consumers.

Last year, the country got US$125 million in debt funding from the African Development Bank (AfDB) to upgrade the Cahora Bassa hydroelectric scheme.

The upgrade, when completed, is expected to extend the life of the plant by at least 25 years, improving reliability of power supply and boosting energy security.

Mphanda Nkuwa Hydropower Project

The Mphanda Nkuwa Hydropower Project, worth $4.5 billion, is a new project conceived to meet growing domestic demand for power supply in Mozambique. Once domestic demand is satisfied, the remaining output would be exported to neighbouring countries, including South Africa where demand for clean energy remains high. 

To bring the project to life, Mozambique is already partnering with investors. In May this year, the country picked a consortium that included TotalEnergies SE and Electricité de France SA as strategic partners. The consortium, which also includes Sumitomo Corp and Kansai, would help build the 1,500 MW Mphanda Nkuwa dam and an associated transmission line, helping to curb an electricity shortage in the region.

In August, the European Union (EU) and the European Investment Bank (EIB) announced they will provide €500 million to fund the hydroelectric power project.

According to the Mphanda Nkuwa Hydroelectric Project Implementation Office (GMNK), €300 million will fund the construction of the high-voltage power transmission line, while the remaining €200 million will go to the power station.

The Mozambique government expects financial close on the project in 2024 and completion by 2030.

Central Termina de Temane

Beyond hydropower, Mozambique is also exploring the use of gas to grow its power generation.

Last year, it broke ground on the 420 MW, $652m Temane gas-to-power plant being developed by Globeleq at Temane in the country’s Inhambane Province.

In July, Sasol commissioned its gas facility in Mozambique on its Production Sharing Agreement, giving a boost to the country’s gas-to-power initiative. The company has said the project will sell gas to Central Térmica de Temane (CTT).

The gas-to-power plant, when completed, will sell electricity to Electricidade de Moçambique (EDM), the state-owned utility, under a 25-year deal.

Solar power projects

In addition to hydropower and natural gas, Mozambique is also looking to solar to grow and deepen its mix of clean energy sources. To make that a reality, EDM has since set a target to deploy an installed capacity of 200 MW of renewable energy by 2030.

To meet its target, Mozambique established the Renewable Energy Auction Programme (PROLER) in 2021 to assist the national electricity company in setting up calls for project tenders related to renewable energy power generation.

The country has made considerable progress. While hydropower generation capacity has remained stable at 2,194MW over the years, power from solar has jumped from mere 5 MW in 2013 to 108 MW in 2022.

The Mocuba Solar Power Station (40 MW) and Metoro Solar Power Plant (41 MW) are some of the major projects that have already started up.

Cuamba (19 MW) and Balama (11.25 MW) are under construction, while the Linchinga Solar Power Plant (50 MW) and Dondo Solar PV Plant are under development.

The Nacala Solar Power Project is another major project. The 100 MW ground-mounted solar project is at the feasibility stage. Owned and being developed by WHN Solar, the project is expected to commence construction in 2025. Commercial operation is scheduled for 2027.

Harnessing natural resources for energy security

As industrial and commercial growth pushes demand for electricity, Mozambique is betting on its natural endowments in hydro resources, natural gas and renewable energy to secure electricity for consumers in the southern African country

“Endowed with a diverse and vast energy matrix, far above what is needed to satisfy domestic demands in decades, the country is in good conditions to provide low-cost solutions for the region,” EDM said earlier this year.