- The World Bank plans to provide debt and equity funding as well as risk guarantees and insurance for the 1500MW Mphanda Nkuwa plant on the Zambezi river and an associated US$1.4 billion power transmission project.
- The World Bank President, Ajay Banga, made the announcement in Maputo over the weekend.
It is the first step in a five-to-10 year plan to boost electricity production by adding smaller power plants of 400 MW and 200 MW upstream, expanding Cahora Bassa by more than 50% and developing a 400 megawatt solar plant close by. Support for some of that may be included in a new five-year country partnership framework that the World Bank is working on for Mozambique.
In December 2023, an international consortium headed by the French electricity company, EDF, signed an agreement in Maputo on Wednesday with Mozambican state bodies to implement the 1500MW Mphanda Nkuwa hydro-electric project, on the Zambezi River, in the central province of Tete.
The Mphanda Nkuwa project involves building a dam about 60 kilometres downstream from the existing dam at Cahora Bassa plus a high voltage transmission line running for 1,300 kilometres from the Zambezi Valley to Maputo.
Other members of the EDF-headed consortium include a second French company, TotalEnergies, and Sumitomo of Japan. For the Mozambican side, agreements were signed by the two Mozambican publicly owned electricity companies, EDM, and Hidroelectrica de Cahora Bassa (which operates the Cahora Bassa dam), and by the Mphanda Nkuwa Implementation Office (GMNK).
Construction of the dam and power station is budgeted at 5.5 billion US dollars. During the construction phase, Mphanda Nkuwa will employ about 7,000 workers, and once the power is being generated there will be 3,000 permanent jobs, 95 per cent of them occupied by Mozambicans.
Financial closure of the project is forecast for late 2025 with commissioning planned for 2031.
Electricity demand in Southern Africa expected to more than double by 2040
According to the world bank, electricity demand in the Southern African Power Pool (SAPP) is expected to more than double by 2040, driven by expansion of electricity access and growth in economic activities in the region. The SAPP was established in 1995 to integrate the power systems of SADC’s 12 non-island countries. It is now the most advanced power pool in Africa in terms of volume of energy trade and market structure. As of 2021, the average access to electricity in the SADC countries was about 46 percent, ranging from less than 20 percent in Malawi and DRC to about 90 percent in South Africa.
Electricity access is expected to rapidly increase in the coming years as countries implement electrification programs towards achieving near universal access by 2030, in line with the United Nations Sustainable Development Goal 7 (SDG7). Coupled with expected economic growth in the region, the regional peak electricity demand is expected to rise from about 50 GW in 2021 to over 110 GW in 2040, with an increase in generation from about 300 TWh to 700 TWh over the same period.
Author: Bryan Groenendaal
