Mozambique: HCB and EDM signed financing agreement for Mphanda Nkuwa Hydropower Project

Electricidade de Moçambique (EDM), an ALER member company, and Hidroeléctrica de Cahora Bassa (HCB), the company that operates the Mphanda Nkuwa Hydropower Project, have signed an agreement to provide financing of more than 3 million dollars (2.8 million euros).

The agreement, signed on August 16, establishes the terms and conditions to be applied to the budget of the Mphanda Nkuwa Hydropower Project.

According to EDM, "this amount represents EDM's contribution (...) and must be paid by the time the project reaches financial close".

The development costs of the Mphanda Nkuwa Hydropower Project are supported by EDM and Hidroeléctrica de Cahora Bassa, "companies mandated by the government to develop and implement" the project, and "should be accounted for as advances to the share capital of the special purpose companies to be set up" for its development.

Mphanda Nkuwa will be the second largest hydropower station in the country, after the Cahora Bassa Hydropower Station (HCB), which has a capacity of 2,070 megawatts. The hydropower station under development will have an installed power generation capacity of up to 1,500 megawatts and a 1,300-kilometre high-voltage line from Tete to Maputo.

At an estimated cost of 4.5 billion dollars (4.2 billion euros), Mphanda Nkuwa will be built 61 kilometres downstream from the Cahora Bassa hydropower station on the Zambezi River in Tete province.

"The project will be the lowest cost option for energy production" and should strengthen Mozambique's position in the area of energy exports as a "regional energy centre", stressed the Mphanda Nkuwa Hydropower Project Office.

In June, the European Union (EU) and the European Investment Bank (EIB) announced an investment of 500 million euros for the Mphanda Nkuwa Hydropower Project.

A total of 300 million euros will be allocated to the high-voltage power line (of which 50 million euros is a donation) and the remaining 200 million euros will be for investment in the hydropower station.

The announcement was made a few days after the Mozambican government announced that a consortium led by Electricité de France (EDF) and including ALER's associated company TotalEnergies had been chosen as the "preferred bidder" to carry out the project under a concession regime.

This will be followed by the fundraising phase until financial close (initially scheduled for August 2024), when the project is expected to have the necessary funds to go ahead and operate until 2030.

"The project will be the lowest cost option for energy production" and should strengthen Mozambique's position in the area of energy exports as a "regional energy centre", stressed the Mphanda Nkuwa Hydropower Project Office.

In June, the European Union (EU) and the European Investment Bank (EIB) announced an investment of 500 million euros for the Mphanda Nkuwa Hydropower Project.

A total of 300 million euros will be allocated to the high-voltage power line (of which 50 million euros is a donation) and the remaining 200 million euros will be for investment in the hydropower station.

The announcement was made a few days after the Mozambican government announced that a consortium led by Electricité de France (EDF) and including ALER's associated company TotalEnergies had been chosen as the "preferred bidder" to carry out the project under a concession regime.

This will be followed by the fundraising phase until financial close (initially scheduled for August 2024), when the project is expected to have the necessary funds to go ahead and operate until 2030.