One of Mozambique’s most significant power sector investments, the $506 million Temane Transmission Project (TTP), will commence construction later this year.
This Power Africa-supported project will deliver much-needed electricity from power plants at Temane in the northern part of Inhambane Province to the nation’s capital, Maputo, in the south via a 563 kilometer transmission line.
In December 2020, remaining project funders, the Islamic Development Bank (IsDB) and the OPEC Fund for International Development (OFID), issued letters of effectiveness, approving disbursement of their portion of debt funding.
The TTP reached its first funding milestone in June and July of 2019 when all financiers, including Power Africa partners the World Bank, the African Development Bank, and the Norwegian Trust Fund, committed to their respective funding contributions. The financial agreements between project funders and Mozambique’s national utility, Electricidade de Moçambique (EDM), have several effectiveness conditions that must be met before the funds are released. With the IsDB and OFID issuing effectiveness letters in December, all sources of funding for the TTP became available, giving the green light to begin building.
Power Africa provided support for the project’s evolving organizational and technical needs through an embedded advisor within EDM from January 2018 to December 2020. At crucial turning points, and throughout the unprecedented COVID-19 pandemic, Power Africa advised and facilitated engagements between the funders and EDM to finalize the project financing plan and prepare the operational team to meet TTP’s complex operational requirements.
Linking the Northern and Southern Power Systems to Boost Energy Security and Economic Development
A key component of Mozambique’s 2015–2024 National Energy Strategy is the development of a transmission system to connect Mozambique’s northern, central, and southern power grids and strengthen regional connectivity to the Southern African Power Pool (SAPP). The TTP forms part of this transmission system, the Mozambique Integrated Transmission Backbone System (STE Project), making it essential to the social and economic transformation underway in Mozambique and Southern Africa.
The development of the TTP will facilitate a sustainable and renewable electricity supply and increase the reliability of available energy. The project supports EDM in its development of several distribution projects to increase connections, unlock the agricultural potential of rural areas, and create higher value industrial jobs. The project itself is expected to create close to 1,800 jobs during the three-year construction phase.
“Power Africa has provided valuable technical assistance as well as an embedded advisor to EDM in Maputo, Mozambique. The embedded advisor has been responsible for managing and coordinating the various TTP development work streams,” Pedro Nguelume, EDM Administrator.
In addition to increasing Mozambique’s generation capacity and energizing its social and economic transformation, this project is also of great importance to the Southern African region.
Increased access to affordable and reliable energy supply across Southern Africa requires greater cooperation across borders to ensure power can move freely and securely. With efficient transmission systems in place, greater volumes of electricity can be traded at reduced costs to governments and consumers.
With the TTP reaching financial close, EDM is one step closer to completing the first phase of the Mozambique Integrated Transmission Backbone System Project, which will link the northern and southern power systems, contributing to sustainable national and regional economic growth.