A financing package of $55 million including $19 from the International Finance Corporation (IFC); $19 million from Climate Investment Funds; and a syndicated loan of up to $17 million has been announced to enable the building of the first utility scale solar photovoltaic plant in Mozambique.
The project will also receive a $7 million Viability Gap Funding grant from the Technical Assistance Fund of the Private Infrastructure Development Group, a multi-donor funded institution that encourages private investment in infrastructure in emerging markets.
The plant which will help increase the climate resilience of the country’s electricity sector and deliver power to rural areas will sell the generated power to the state-owned public electric utility Electricidade de Moçambique (EdM) as part of a 25-year agreement.
IFC Country Manager Jumoke Jagun-Dokunmu said IFC’s investment reaffirms its commitment to renewable energy in emerging markets.
Its financing will support the development of a 40.5 MW solar PV plant in Mocuba, Mozambique being developed by Norway-based independent power producer Scatec Solar; Norway’s development finance agency Norfund; and EdM.
Raymond Carlsen, CEO, Scatec Solar said, “Scatec Solar is committed to harnessing Mozambique’s solar potential and infusing grid stability.
This is especially important for a country that relies on a long distance power transmission system that is vulnerable to interruptions. We will leverage IFC’s knowledge and support to ensure greater resilience for the country’s electricity sector.”
This investment will expand electricity supply in one of the least developed regions of a country which has limited access to electricity as well as support electricity infrastructure and promote foreign direct investment (FDI) in Mozambique.
Severe power deficits hamper economic and social development in the country.
“Access to reliable energy is a prerequisite for development and this solar power plant will be an important first step in increasing Mozambique’s renewable power generation,” said Norfund’s CEO Kjell Roland.
More funds to finance the project are being mobilized from Emerging Africa Infrastructure Fund, which provides debt products to private sector infrastructure projects in sub-Saharan Africa.