More than a decade in the planning, Mozambique’s mighty Mphanda Nkuwa hydropower project is moving closer to becoming a reality
The country, in partnership with the African Development Bank (AfDB) is working to secure financing for the US$4.5bn scheme, a major initiative aimed at strengthening Mozambique’s energy infrastructure and boosting regional power exports.
The project is being developed by a strategic consortium comprising EDF and TotalEnergies of France, alongside public sector partners.
Most recently, a high-level technical workshop was held at AfDB’s country office in Maputo, which brought together representatives from the Ministry of Finance, the Ministry of Mineral Resources and Energy, Electricidade de Mozambique (EDM) and the Mphanda Nkuwa Implementation Office (GMNK).
The session focused on operationalising a Credit Enhancement facility designed to de-risk the project and attract private capital to reduce the cost of energy for Mozambique.
The bank has acted as a strategic adviser to the government throughout the project’s development, supporting a transparent framework that led to the selection of a reputable strategic investor consortium.
The project is now positioned to start discussions on its security structure, with a Partial Risk Guarantee (PRG) seen as a key element for bankability.
The government has requested a Partial Risk Guarantee facility to backstop the liquidity obligations of EDM, mitigating off-taker risk for international lenders.
In addition, AfDB plans to mobilise concessional and grant funding to support the Mozambique regional transmission line that will deliver power from the Mphanda Nkuwa site to industrial centres and enable exports to neighbouring countries.
"This workshop marks the shift from advisory to execution,” said Rômulo Corrêa, AfDB’s country manager.
“Having worked with the government to structure the transaction, we are now intending to de-risk Mphanda Nkuwa by utilising AfDB support. Under our ADF-17 mandate to 'Unlock Capital at Scale,' we intend to secure the financing framework that will position Mozambique as the energy powerhouse of southern Africa.”
Once operational, the 1,500 MW run-of-river Mphanda Nkuwa project will provide universal energy access across Mozambique, supply competitive power to industries, and serve as a baseload exporter to the Southern African Power Pool (SAPP), as well as generating hard currency revenues for the country.
Read more:
Ethiopia inaugurates GERD hydro dam
Burundi's Jiji hydro power plant opened
Globeleq to support Zambia hydro project
Mphanda Nkuwa hydro project inches closer
Mphanda Nkuwa will power up Mozambique's energy sector (Image source: Adobe Stock)
