London — Construction has begun on the 40 megawatt solar power plant in the district of Mocuba in the central Mozambican province of Zambezia, following the announcement by the Norwegian energy company Scatec Solar that it has reached financial closure on the project.
The project is a public-private partnership between Scatec Solar and Mozambique's publicly-owned electricity company, EDM, and project debt financing will come from the International Finance Corporation (IFC) and the Emerging Africa Infrastructure Fund.
The Mocuba power station will be the largest solar power plant in sub-Saharan Africa outside of South Africa, and it is expected to supply power to 175,000 households, with an estimated output of 80,000 megawatt hours per year. This is 4.8 per cent of the country's currently available electricity capacity, but 40 per cent of the electricity grid north of the Zambezi.
The solar power station will be operated by the company CESOM (Central Solar de Mocuba), owned by Scatec Solar (with a 52.5 per cent share), EDM (25 per cent), and the Norwegian Investment Fund, Norfund (22.5 per cent). CESOM has signed a 25-year agreement to sell the power to EDM.
The project is budgeted at 76 million US dollars, which will be funded through equity of 14 million dollars, a grant of 7 million dollars, and project debt of 55 million dollars. The project debt consists of 19 million dollars from the IFC, a concessional loan of 19 million dollars from the Climate Investment Fund, and a syndicated loan of 17 million dollars from the Emerging Africa Infrastructure Fund (EAIF).
EDM chairperson, Mateus Magala, commented that “EDM is very pleased that the Mocuba Solar IPP project has reached financial close through a well structured public-private partnership between EDM, Scatec Solar and Norfund, and with excellent support from IFC and EAIF as lenders, as well as the Government of Norway”.
Norfund's Mark Davis added, “Norfund appreciates being a partner in this first solar power project in Mozambique. Access to reliable energy is a prerequisite for development. Clean energy is therefore a focus investment area for us”.