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Ministry of Mineral Resources and Energy, Mozambique (MIREME) represented by Gabinete de Implementação do Projecto Hidroeléctrico de Mphanda Nkuwa (GMNK), intends to invite proposals for selection of strategic partner to own majority stake and develop the Mphanda Nkuwa Hydro Power Project

HydroThe project is anticipated to support Government’s vision of universal access of electricity in Mozambique by 2030. (Image source: Synergy Consulting)

Electricidade de Moçambique (EDM) and Hidroeléctrica de Cahora Bassa (HCB) are supporting MIREME and GMNK in the development of the 1,300MW run of river Mphanda Nkuwa Hydro power Plant in the Zambezi River, 60 kilometres downstream of Cahora Bassa Dam and associated Transmission Infrastructure project, including the selection of a strategic partner

Synergy Consulting is the transaction advisor and is supported by Worley as technical advisor, Baker McKenzie as legal advisor, together with HRA Advogados as local legal advisor.

The project is of significant strategic importance for Mozambique, said Carlos Yum, director, GMNK. The project is anticipated to support Government’s vision of universal access of electricity in Mozambique by 2030 while also accelerating industrialisation rapidly in the country and boosting the growth through reliable transmission electrical infrastructure. The project will create power export opportunities in the region to help realise Mozambique’s vision to establish itself as a regional power hub while ensuring security of domestic supply.

The Generation project is proposed to be developed as an IPP project, jointly owned by the government / government-owned entities (like EDM, HCB) and a strategic partner. The project offtake is proposed to be executed through a long-term PPA with EDM, along with direct / indirect offtake agreements with other potential off-takers in the region.

The proposed least cost transmission system lines may include development of a 400 kV AC line and a 550 kV HVDC line. The configuration of the system shall be finalised based on a transmission study, which will also determine whether the AC line can be part of EDM’s normal transmission expansion plan.

GMNK and the advisory team are charting out the various aspects of the project structuring and tender process design with regards to Strategic Partner Selection Process. GMNK along with the strategic partner will also seek financing from multilateral and bilateral lenders. Strategic partner is expected to have relevant experience in development of projects of comparable size. The Request for Proposal for strategic partner selection is planned to be launched by end of 2021. The goal is to achieve financial close by 2024 and commissioning the Project by 2030.