Financing closes for Mozambique’s first

large-scale PV project
Scatec Solar, alongside Norfund Investments and Electricidade de Mozambique have
closed financing and begun construction on the first utility-scale solar plant in
Mozambique, a 40 MW project to be located close to the city of Mocuba.

PV 06/03/2018

Mozambique’s first utility-scale solar project will deliver electricity to the national grid
under a 25-year power purchase agreement (PPA) with state owned utility, Electricidade
de Mozambique. Debt financing for the project is provided by the International Finance
Corporation and the Emerging Africa Infrastructure Fund.

Scatec Solar estimates the project’s total cost at US$76 million, with $14 million funded
through equity, a $7 million grant and $55 million raised through project debt. The
company is providing EPC and O&M services, and is a 52.5% equity partner in the
project. Other partners in the project are KLP Norfund Investments (22.5%) and
Electricidade de Mozambique (25%).

The International Finance Corporation provided project debt of $19 million, while a
further $19 million came in the form of a concessional loan from the Climate
Investment Fund. The Emerging Africa Infrastructure Fund provided a $17 million
syndicated loan – to be managed by Investec Asset Management, which is part of the
Private Infrastructure Development Group (PIDG), as well as a direct grant of $7
million.

“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,” said EDM’s Chairman and CEO, Mateus Magala.
“Experiences gained with the Mocuba project is invaluable in shaping Mozambique’s
renewable energy future.”

Mozambique has so far benefited mainly from off-grid solar and microgrid system’s
bringing power to the country’s more remote regions. It has plans, however, to
modernize its grid to allow access more renewable energy projects to connect, and to
initiate an auction mechanism for renewables with the help of the EU.