Scatec Solar closes financing for Mozambique’s first large-scale solar plant

Scatec Solar, KLP Norfund Investments and Electricidade de Mozambique (EDM) have closed debt financing and initiated construction of a 40 MW solar plant in Mozambique.
Scatec Solar closes financing for Mozambique’s first large-scale solar plant
Courtesy of Scatec Solar

The Plant is located close to the city of Mocuba in Mozambique’s Zambézia Province and is expected to deliver 79,000 MWh of electricity per year to northern regions of Mozambique. It will deliver the power to the national grid and produce enough energy to serve about 175,000 households. It is the first large-scale solar plant to be built in the country and therefore marks an important step in Mozambique’s ambition to increase the amount of renewable energy in its energy mix.

The three partners signed a Power Purchase Agreement (PPA) for the solar plant in October 2016. This secures the sale of power from the plant over a 25-year period to the state-owned utility Electricidade de Mozambique (EDM).

The debt financing for the plant has been provided by the International Finance Corporation (IFC), which is a member of the World Bank Group, and also by the Emerging Africa Infrastructure Fund. The costs for the project have been estimated at $76 million, funded through equity of $14 million, a grant $7 million and project debt of $55 million.

IFC provided project debt of 19 million on it’s own account with a $19 million concessional loan from the Climate Investment Fund and a syndicated loan of $17 million from the Emerging Africa Infrastructure Fund (EAIF). In addition, EAIF is directly providing a $7 million Viability Gap Funding grant for the project raised from the Technical Assistance Fund of the PIDG.

Equity partners are Scatec Solar (52.5 percent), KLP Norfund Investments (22.5 percent) and EDM (25 percent). Scatec Solar will deliver Engineering, Procurement and Construction (EPC) services, as well as Operation and Maintenance (O&M) and Asset Management services to the power plant. 

“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, Dr Mateus Magala. “Experiences gained with the Mocuba project is invaluable in shaping Mozambique's renewable energy future”.

Oumar Seydi, IFC Director for Sub-Saharan Africa, added that the project is in one of the least developed provinces of Mozambique. It will diversify the country's power generation mix and help increase access to electricity.

For additional information:

Scatec Solar

KLP Norfund Investments

Electricidade de Mozambique (EDM)

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