Mozambique’s power sector runs predominantly on hydro generation. However, large discoveries of coal reserves and offshore natural gas in the north of the country may change this mix in the future. These discoveries also create challenges for how to develop infrastructure and provide power supply to serve increasing demand from these industries.
The hydrocarbon discoveries, coupled with agricultural growth, have boosted Mozambique’s economy, which grew at an average rate of 7.3% in the past four years. That growth has exacerbated the country’s infrastructure and logistics challenges. In the power sector, aging transmission and distribution networks constrain capacity and require frequent and expensive maintenance and repair.
As of 2014, Mozambique’s on-grid generating capacity was 2.2GW, with large hydro power making up 2GW. The remaining capacity is comprised of small scale fossil plants and small hydro. Electricidade de Moçambique (EDM), the country’s state-owned vertically integrated utility, has 5% of its generation capacity and is responsible for transmission and distribution services. Hidroeléctrica de Cahora Bassa’s 2GW large hydro plant is responsible for the remaining generation and is a large exporter of electricity to surrounding countries. MoTraCo runs transmission lines to large industrial projects and to neighbouring Swaziland.
In 2011, a public-private partnership law was published, creating opportunities for private generators. There are currently a 110MW gas-fired plant, two coal-fired power plants amounting to 900MW and a 1.5GW large hydro project being developed by independent power producers (IPPs). Additionally, two other projects are being developed to supply coal mines. All IPPs must sell electricity to EDM under negotiated prices.
To date, clean energy has mainly been deployed to increase the country’s electrification rate, which stands at 40%. Distributed solar systems have been fundamental to bring electricity to small villages, where transmission infrastructure has not arrived. The National Energy Fund (FUNAE) is a government agency dedicated to implementing off-grid projects. FUNAE holds tenders for the installation of systems across the country by private developers.
To foster the development of renewable energy technologies in the country, the Ministry of Energy in 2014 launched a feed-in tariff to provide price premiums to small-scale projects from 10kW to 10MW for biomass, small hydro, solar and wind. Premium rates varied from $0.13-$0.41/kWh. However, regulation to implement the feed-in tariff is still pending. On the utility-scale side, there are plans to develop a wind farm close to Inhambane, 500km north of Maputo.
Mozambique is one of the few countries in Sub-Saharan Africa to have a solar supply-chain facility. The module assembly plant near Maputo aims to produce components for the national market.
Score Summary
Mozambique scored 0.77 in Climatescope 2015, placing it 41st on the list of countries overall, a decline of one place from its position in 2014. The country’s highest score was on Low-Carbon Business & Clean Energy Value Chains Parameter III.
On Enabling Framework Parameter I, Mozambique lost one place to rank 43rd. Its score was supported by its relatively high diesel and kerosene prices.
The country gained five places to take 37th position on Clean Energy Investment and Climate Financing Parameter II. While there has been little investment to date, the sector has benefited from a modest volume of grants and loans.
On Parameter III, Mozambique was placed 30th, reflecting the presence of a small number of clean energy value chains and service providers, including a solar module assembly plant.
On Greenhouse Gas Management Activities Parameter IV, the country ranked 38th, scoring best on the Clean Development Mechanism risk indicator.