Mozambique's increasingly dynamic renewables market
September was marked by the entry of two new players in the Mozambican renewable energy market.
On-grid, or grid-connected power stations, the Mocuba solar plant in Zambezia province has been inaugurated, with a capacity of 40 MW to be injected into the national grid.
This project, covers an area of 200 hectares, of which 170 are occupied by panels, will produce 79 GWh of clean energy for 175,000 customers in northern Mozambique. The project is the result of a public-private partnership between the Norwegian company Scatec Solar with 52.5%, EDM (ALER’s Member) with 25% and the Norwegian development agency, Norfund, with 22.5%. The total cost of the project was $ 76 million, financed with equity of $ 14 million, a grant of $ 7 million and $ 55 million of debt, divided into $ 19 million from the International Finance Corporation ( IFC), a $ 19 million concessional loan from Climate Investment Fund and a $ 17 million syndicated loan from Emerging Africa Infrastructure Fund (EAIF). The purchase agreement was signed in between the Mocuba solar plant and EDM and has a duration of 25 years.
It is expected that, still during the present year, will be added a new Solar Plant in Metoro, in Cabo Delgado province, built by NEOEN (ALER’s Member) as a result of an investment of US $ 76 million, as announced by ALER in December 2018.
These two projects will be structural since, according to EDM, the Central and Northern regions currently have a power availability from the national grid of 3,040 MW and a deficit of 150 MW, contributing not only to the supply of energy to these regions but also to the diversification of the energy mix through renewables.
The off-grid renewables market, i.e. stand-alone systems, has also shown an increasing dynamic with the recent entry of Fénix International, a subsidiary of ENGIE, with the goal of bringing clean and affordable energy to 200,000 households in the next 3 years through the commercialization of Solar Home Systems. The company will use pay as you go (PAYGO) system to reduce costs and bring quality and affordable energy to rural consumers. In a partnership with Vodacom and Vodafone M-Pesa SA, the company aims to address the challenges of distribution, connection and mobile payments that make it difficult for rural people to access affordable energy products.
Fénix is joining the other two companies already present in the market. The first was SolarWorks!, in the market since 2016, as reported by ALER, present in 5 provinces, aims to reach 8 provinces with 500 employees and illuminate 50,000 families by the end of the year. The solar systems they sell can be paid in stages adapted according to the conditions of each customer using panels manufactured at national level by FUNAE. Since 2018, the company has a stake from EDP Renováveis, ALER’s Associate, as also reported.
Earlier this year we also reported a second player to enter in the market. Ignite, with the support and investment from Source Energy, ALER’s Member, started in February a nationwide project aiming to connect over the next three years 6.2% of the population living in remote areas of the country. 1.8 million people are expected to have access to safe, sustainable and accessible electricity, thus replacing the use of polluting energy sources such as kerosene or coal through the distribution of Solar Systems consisting of an installation kit with a 10 to 15 watt solar panel and a long lasting lithium battery.
Mozambique has set the ambitious target of bringing electricity to 100% of the population by 2030, which in a large country with a large population living in rural areas and where only 27% of the population has access to electricity, poses huge challenges and simultaneously opportunities for investment in on and off-grid renewable energy.
The Government has been giving positive signals and the market has responded by showing increasing dynamism. It is with great satisfaction that ALER and its Members have been following the consolidation of the renewables market in Mozambique and hopes to continue contributing to the promotion of investment in the country.