AfDB backs 1,500MW Mozambique hydro plant

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African Development Bank signs agreement with Gabinete de Implementação do Projecto Hidroeléctrico de Mphanda Nkuwa to provide advisory services for $4.5bn Mphanda Nkuwa project.

A major step forward has been taken for the $4.5bn Mphanda Nkuwa hydropower project in Mozambique, as the African Development Bank (AfDB) signs an agreement with delivery specialists. 

The project is located on the Zambezi River in the Marara District of the country’s Tete Province. The hydropower plant will be 60km downstream from Cahora Bassa dam and 70 km upstream from Tete city. A transmission system comprising 1,300km of 550kV high voltage DC transmission line between Cataxia and Maputo will also be constructed.

If financial closure can be achieved by the end of 2024, then the plant is expected to start generating electricity in 2031.

Mr Carlos Yum, director of Gabinete de Implementação do Projecto Hidroeléctrico de Mphanda Nkuwa, said: “The partnership with African Development Bank further strengthens the capacity of our implementing agency to develop the Mphanda Nkuwa project. The African Development Bank will ensure that world class environmental, social and governance and associated standards are adhered to during the development, and that the project is attractive to reputable developers, financiers and investors to ensure competitive and least-cost power for Mozambique and the region.” 

Continued expansion of Mozambique’s generation capacity is required to meet growing domestic demand and drive economic and social development. In addition, the southern Africa region offers market opportunities that Mozambique is well placed to meet as a supplier of competitively produced energy. Mphanda Nkuwa is projected  to have one of the lowest electricity production costs in the region.

Dr Kevin Kariuki, African Development Bank vice president for power, energy, climate and green growth, commented: “The project reinforces our efforts to combat climate change in a region that is desperately short of power but equally in need of transformation and a just energy transition. It is also a great privilege to lead the bank’s team that will be executing this advisory mandate. We are honoured to be chosen by Mozambique to partner on this important project.” 

The project builds on earlier success in attracting  private investment into the country, including several independent power producers. These include the 175MW Central Térmica de Ressano Garcia,  the 120MW Central Térmica de Gigawatt, the 40MW Mocuba solar plant, the 40MW Metoro solar plant and, most recently, the 450MW Temane Power Project.