France’s EDF announced as lead partner for building Mozambique’s 1500MW Mphanda Nkuwa hydro-electric dam

• The Mozambican government has announced that it has chosen a consortium led by Electricity of France (EDF) as its preferred partner for building the 1500MW hydro-electric dam at Mphanda Nkuwa on the Zambezi river, about 60 kilometres downstream from the existing dam at Cahora Bassa. 
• The European Union (EU) and the European Investment Bank (EIB) will contribute €500 million to the financing of the project according to the Mphanda Nkuwa Hydroelectric Project Implementation Office (GMNK).
• €300 million is allocated for transmission infrastructure while €200 million is provided for the construction of the dam. 

Other members of the consortium include the French oil and gas company, TotalEnergies, and the Japanese companies Sumitomo and Kansai.

In addition to the preferred bidder, the government, as a precaution, also indicated, as a reserve bidder, a consortium headed by ETC Holdings, and including CECOT (a subsidiary of the Portuguese company Mota-Engil), the Zambian power company ZESCO, and PetroSA of South Africa. If the preferred bidder runs into difficulties, the reserve bidder could take over the project.

Related news: IFC signs to support for 1500MW Mphanda Nkuwa hydro-dam 

There now follow negotiations on implementing the project, which is expected to be signed in July. The cost of the new dam and power station is estimated at more than four billion US dollars.

The Mphanda Nkuwa implementation office, chaired by Carlos Yum, made the announcement in Maputo. The team which assessed the bids was chaired by the Ministry of Mineral Resources and Energy, and included representatives of the publicly owned electricity company, EDM, the Cahora Bassa operating company, HCB, the Bank of Mozambique, and the Ministries of Economy and Finance, of Labour, and of Land and the Environment.

Carlos Yum announced that the chosen consortium presented a guarantee of ten million dollars to the government. In the next phase, it must present a guarantee of 15 million dollars as proof of its commitment to developing the project.

The EDF consortium will hold 70 per cent of the shares in the Mphanda Nkuwa operating company, HMN. The other 30 per cent will be divided equally between EDM and HCB.

The project includes a power station with an installed capacity of producing 1,500 megawatts of power, and a high voltage electricity transmission line running for 1,300 kilometres, from the Zambezi Valley to Maputo.

Author: Bryan Groenendaal