Maputo — IFC, a member of the World Bank Group, today announced a landmark financing package of $55 million to build Mozambique's first utility scale solar PV plant, which will help increase electricity sector climate resilience and deliver power to rural areas. It includes $19 million from IFC's own account, $19 million from Climate Investment Funds, and a syndicated loan of up to $17 million.
IFC's financing will support the development of a 40.5 MW solar photovoltaic plant in Mocuba, Mozambique, being developed by Norway-based independent power producer Scatec Solar, Norway's development finance agency Norfund, and Mozambique's electricity utility Electricidade de Moçambique (EdM). Funds are being mobilized from Emerging Africa Infrastructure Fund, which provides debt products to private sector infrastructure projects in Sub-Saharan Africa. 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.
"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," said Raymond Carlsen, CEO, Scatec Solar ASA.
"The signing of the Mocuba financing is a great achievement for EdM and Mozambique's electricity sector. EdM wishes to thank Scatec Solar, Norfund, PIDG and IFC for their excellent cooperation and the hard work in getting the project to this important milestone," said Mateus Magala, Chairman of EdM.
"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. We appreciate that Norfund's additional credit support played an instrumental role in helping make the financing package viable", said Norfund's CEO Kjell Roland.
Severe power deficits hamper economic and social development in Mozambique. The project is part of IFC's broader efforts to promote private investment and help bring reliable and clean electricity to consumers and diversify the energy mix in order to help adapt to long term climate change impacts.
"Our investment in Mozambique's first utility scale solar power plant reaffirms IFC's commitment to renewable energy in emerging markets," said IFC Country Manager Jumoke Jagun-Dokunmu. "There is limited access to electricity in Mozambique, particularly in rural areas. This investment will expand electricity supply in one of the least developed regions of the country while also supporting electricity infrastructure and promoting foreign direct investments at an important time."
The power generated from the plant will be sold to EdM, the state-owned public electric utility, as part of a 25-year power purchase agreement.
SOURCE International Finance Corporation (IFC)