Mozambique, EDF-Led Consortium Sign Agreement for 1.5GW Hydropower Plant

18 Dec 2023
Mozambique, EDF-Led Consortium Sign Agreement for 1.5GW Hydropower Plant

The Mozambique government has selected a consortium led by EDF, TotalEnergies, and Sumitomo Corporation for the joint development of the Mphanda Nkuwa hydropower project. The consortium signed a joint development agreement on 13 December with the Gabinete de Implementação do Projeto Hidroelétrico de Mphanda Nkuwa (GMNK), Electricidade de Moçambique (EDM), and Hidroelétrica de Cahora Bassa (HCB). President Filipe Nyusi, as well as senior French and Mozambican government officials, were present at the signing.

EDM and HCB will own 30% of the project, while the consortium will own the remaining 70%. The project is located on the Zambezi River, 60km downstream from Cahora Bassa in the Tete Province. It will comprise a dam, a 1,500 MW run-of-river power station, and a 1,300 km high-voltage transmission line from the project site to Maputo.

Mike Sangster, SVP Africa, and Vincent Stoquart, SVP Renewables at TotalEnergies, noted that “TotalEnergies is delighted to expand its presence in Mozambique beyond the Mozambique LNG project with a significant investment in renewable energy, which will benefit the people of Mozambique. It is a new example of TotalEnergies’s ability to implement its multi-energy strategy in oil & gas countries to support them in their energy transition.

TotalEnergies, in its statement, added that “the consortium will leverage EDF’s extensive hydropower experience and reputable technical expertise, TotalEnergies’ know-how in developing large and complex integrated energy projects worldwide, and Sumitomo’s global experience in financing strategic IPP projects.

The hydropower plant, expected to be completed by 2031, will expand Mozambique’s electricity generation capacity by over 50%, powering over 3 million households in Mozambique and the region.

The project is estimated to cost about $4.5 billion, and the consortium is expected to invest between $500 million and $700 million corresponding to the proportion of its participation in the total investment. The project is also being supported by the African Development Bank and the World Bank through the International Finance Corporation (IFC).

INCREASING ENERGY TRADE

Mozambique is a major electricity exporter in the Southern Africa Power Pool (SAPP). Currently, it exports over 60% of the electricity generated from the 2,075 MW Cahora Bassa hydropower station to South Africa. It has bilateral contracts to export power to seven countries and through the SAPP day-ahead market.

Expanding its renewable energy generation and transmission capacity will allow it to further integrate its energy systems with the SAPP. This project will strengthen the country’s congested network, enabling efficient feeding of generated electricity to the interconnection points in the SAPP, facilitating increased regional electricity trade and power access across the region.

Image Source: Mozambique Presidency

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