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Mphanda Nkuwa Hydropower Project receives Strategic Partner bids

The Mphanda Nkuwa Hydropower Project has an installed capacity of 1,500MW. (Image source: Synergy Consulting)

The Ministry of Mineral Resources and Energy, Mozambique (MIREME) and Gabinete de Implementação do Projecto Hidroeléctrico de Mphanda Nkuwa (GMNK) have received bids for the Mphanda Nkuwa Hydropower Projects Strategic Partner selection

Two international consortia have sent bids in response to the Request for Proposal (RFP) for the selection of a Strategic Partner to own a majority stake and develop the Mphanda Nkuwa Hydropower Project in Mozambique. The RFP process was launched in June 2022 to seven pre-qualified bidders and the announcement of the selected partner is expected in Q2 2023.

The project, with an installed capacity of 1,500MW, is a run-of-river hydropower project, 60 km downstream from the existing Cahora Bassa Dam on the Zambezi River in Mozambique.

The power generated is planned to be evacuated through a new transmission system encompassing a c.1,300 km, 550kV, high-voltage DC transmission line connecting Cataxa to Maputo. MIREME and GMNK, along with the Strategic Partner, will together develop the transmission system.

The transaction advisory team for the project is led by Synergy Consulting which has been actively involved in key activities like designing the tender process for the selection of the Strategic Partner, market sounding, and bid evaluation. This will be followed by contract negotiations.

Strategic importance of the project:

The project is anticipated to support the Government’s vision of universal access to electricity in Mozambique by 2030, while also accelerating the industrialisation of the country and boosting growth through reliable transmission electrical infrastructure;

The project is expected to be one of the lowest-cost energy providers in Mozambique and the region, thereby significantly lowering the blended cost of electricity;

It will create power export opportunities in the region to help realise Mozambique’s vision to establish itself as a regional power hub while ensuring the security of domestic supply;

It is estimated that more than 5,000 direct jobs will be created during the construction stage of the project alone and around 500,000 long-term jobs will be established for the next 35-40 years;

By providing power access, the project will also indirectly create opportunities for local businesses and manpower in the future.

After the evaluation of the bids, the preferred Strategic Partner is expected to be announced in Q2 2023. The proposed timeline is to achieve financial close by 2024-25 and commissioning of the generation project by 2030.

This article is authored by Synergy Consulting IFA.