18 of July 2023

Cooperation agreement between AfDB and the Government of Mozambique contemplates strategy to increase access to the renewable energy market

The new Country Strategy Paper for 2023-2028 signed by the African Development Bank (AfDB) and the Government of Mozambique, approved on 13 June, is based on two priority areas: fostering improved economic governance and the business environment to facilitate private sector investment and mobilize resources and transforming agricultural value chains by strengthening infrastructure sustainably.


From these two main objectives, the document sets as a strategic priority increasing access and connectivity between domestic and regional markets in transport and on utility-scale renewable energy.


In this regard, AfDB is expected to support Mozambique to increase the electrification grid in homes and businesses in the country, particularly in agricultural areas through:

  • Improving efficiency;
  • Increasing generation, transmission, and distribution capacity.
  • Adding on-grid and off-grid renewable energy generation.
  • Expanding power trade between Mozambique and neighbours, strengthening the SAPP and allowing for economic diversification of the country while  mitigating  energy  risks in  the  region;
  • Improvement of security of electricity supply, namely the 400kV Songo-Matambo and 400kV Caia-Nacala   projects   enabling   regional   transmission   projects   such   as   Mozambique-Malawi, Mozambique-Zambia, and Mozambique-Tanzania. Moreover, to support electrification and a just energy transition.

The Bank will also implement the country’s first Feed in Tariff regime for small/medium renewable energy projects, prepare the Mini-Grid regulatory framework (with tariff structure, design procuring and financing for mini grids) and a project pipeline. Finally, the Bank will use investment projects  to build/upgrade roads and  rails connecting national agriculture production hubs to domestic and regional consumer markets.


The 2023-2028 Country Strategy Paper for Mozambique envisages establishment of a productive special agro-industrial processing zone by 2028 through the creation of 50 new companies and 200 new cooperatives or groups of external producers.

It also projects that new investments will total $100 million, and that Mozambique's electricity exports to southern Africa are expected to equal over five gigawatt-hours.


Source: AfDB