The African Development Bank (AfDB) has explained that the $2.5million funding from the Sustainable Energy Fund for Africa (SEFA) will be used to implement the Mozambique Renewable Energy Integration Program (MREP).
SEFA is a multi-donor special fund managed by the AfDB. It provides catalytic finance to unlock private sector investments in renewable energy and energy efficiency.
The Fund offers technical assistance and concessional finance instruments to remove market barriers, build a more robust pipeline of projects and improve the risk-return profile of individual investments.
The Fund’s overarching goal is to contribute to universal access to affordable, reliable, sustainable, and modern energy services for all in Africa, in line with the New Deal on Energy for Africa and Sustainable Development Goal 7.
“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 director of the AfDB’s renewable energy and energy efficiency department, Dr. Daniel Schroth.
“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.”
He explained that 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 chairman of EDM, Marcelino Gildo Alberto.
“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.
Despite being increasingly affected by severe and sudden cyclones, storms, and prolonged drought periods, Mozambique is endowed with abundant energy from renewable and fossil resources.
In the last ten years, 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 187gigawatts, 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 Bank said it is a key player in the area of energy access in Mozambique. It provided more than $400million in financing for the ongoing $20billion 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.
SEFA is a multi-donor special fund targeting the unlocking of private sector investments capable of 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