Policy Framework and Energy Access Strategies in Mozambique

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Introduction

This articles provides an overview of the different policies and energy access strategies for electrification and renewable energy in Mozambique.

Legal Framework

The prevailing legal instrument for electrification in Mozambique is the Electricity Law from 1997 (Law n.° 21/97). Due to the vital role renewable energy electricity plays in the universal energy access goal, the Electricity Law has been in constant review to ensure technological development and clear tariff mechanisms and business models. With a clearer understanding of the legal framework and the roles of participating stakeholders, the most recent review in 2017 which is yet to be officially published, is expected to improve the involvement of private parties in Mozambique’s energy sector. For this reason, the Law on Public-Private Partnerships serves as a guide of cooperation between the public and the private sector.

In December 2021, a new Regulation for Energy Access in Off-grid Areas was published and approved. This new regulation, active since January 24th, 2022, acts as support to the current legal framework in the off-grid energy sector in Mozambique. It is expected that this new framework:

• offers the private sector a clearer and more transparent process for the implementation of their off-grid electrification projects
• helps reach the electrification goals for 2030
• attracts more private investment

ARENE, the Energy Regulation Authority (Autoridade Reguladora de Energia), has the role of handling and coordinating all processes regarding approval for concessions before and after they have been submitted to the Minister for approval.

Another important energy policy document that states the needs of energy access for the population and the productive sectors is Mozambique’s Energy Policy from 1998. Some of its main objectives are to promote economically viable programmes for the development of energy resources, ensure reliable energy supply, and to improve energy access in the domestic sector. The specifics on the implementation of the policy are better described in Mozambique’s National Electrification Strategy, updated from the Energy Sector Strategy written in 2000.

The following table shows the relevant regulations involved in the improvement of energy access in Mozambique.

Decree n. °93/2021	Regulation for Energy Access in Off-Grid Areas	https://www.lerenovaveis.org/contents/lerpublication/decreto-93-2021_regulamento-de-acesso-a-energia-nas-zonas-fora-da-rede_6586.pdf
Law n.° 21/97, of October 1st	Electricity Law	https://www.edm.co.mz/en/website/page/legislation
Decree n.° 5/98 of March 3rd	Energy Policy	https://energypedia.info/wiki/PT_Politica_Energetica_Imprensa_Nacional_de_Mocambique
Law n.° 15/2011, of August 10th	Law on Public-Private Partnerships (PPPs)	http://www.inp.gov.mz/en/content/download/1345/9019/file/Lei%20n_15%202011.pdf
Law n.° 11/2017, of September 8th	Regulatory Authority for Energy	http://www.salcaldeira.com/index.php/pt/publicacoes/artigoss/doc_download/1160-lei-11-2017-cria-a-autoridade-reguladora-de-energia-abreviadamente-designada-por-arene
Decree n.° 16/2012, of June 4th	Regulations on the PPP Law	https://ppp.worldbank.org/public-private-partnership/sites/ppp.worldbank.org/files/documents/Decreto%20n%20%C2%BA%2069-2013%20-%20Regulamento%20de%20Parcerias%20P%C3%BAblico-Privadas%20e%20Concess%C3%B5es%20Empresariais%20de%20Pequena%20Dimens%C3%A3o.pdf
Decree n.° 5/2016, of 3 November 2016	Public Procurement Regulations.	http://www.ufsa.gov.mz/decreto-5-2016.php
Law n.° 11/2017, of September 8th.	Creates „Autoridade Reguladora de Energia“ - ARENE	https://www.dlapiperafrica.com/export/sites/africa/mozambique/insights/legislation-series/energy/downloads/lei-11_2017_br_141_arene.pdf_2063069299.pdf
Resolution n.° 2/2019, of March 19th	Organic Statute of ARENE	http://arene.org.mz/wp-content/uploads/2021/02/Resolucao-2_2019-Energia_Aprova%C3%A7%C3%A3o-do-Estatuto-Org%C3%A2nico-da-Autoridade-Reguladora-de-Energia-1.pdf

National Strategies and Policies to Improve Energy Access

The central goal of national strategies in Mozambique is to achieve countrywide energy access by 2030. The Integrated Power Sector Master Plan from EDM is the main policy for Mozambique. It has a set goal to increase installed capacity to 6,001 MW by 2030 and 20% integration of renewable energy in the grid. The institutional, financial and technical approach to reach these goals is defined by the National Electrification Strategy (ENE). Mozambique’s state-owned utility, EDM has developed a strategy as well (often referred to as the Rural Electrification Strategy) to ensure the development of the energy sector in Mozambique and drive its growth as an important market in the Southern African region.

These initiatives are based on Sustainable Development Goal (SDG) 7. Read here more about SDG 7 and how energy contributes to the achievement of other SDGs  

Below is a description of the most important plans and strategies active in 2021. For more information, consult the links to each strategy.

Electric Infrastructures Integrated Master Plan (Plano Director de Infraestruturas Eléctricas 2018-2043)

The main objective is to formulate a comprehensive 25 year national power system development plan for the period between 2018 and 2043, and to make it possible for governmental agencies to have access to the technical information on the planning of power generation, transmission and distribution. The plan forecasts a growth on electricity demand in 2043 from 3908 GWh to 35444 GWh and a growth in maximum installed capacity from 655 MW to 5950 MW. With a close cooperation with FUNAE, EDM plans to increase the number of electrified households from 1.3 million in 2017 to 4.6 million by 2043.

The total investment calculated by EDM to fulfil the Master Plan is approx. USD 34 billion. The plan also contains a list of recommendations for the financial management of the private sector and an environmental impact assessment.

To know more about the Integrated Master Plan visit: https://www.edm.co.mz/en/document/reports/integrated-master-plan-2018-2043

EDM Strategy 2018-2028

This strategy is implemented by EDM as an action to drive their growth as Mozambique’s utility, and improve the presence of the Mozambican energy market in the Southern African region. The strategy tackles three main priorities:

1.    Achieving universal access to electricity in Mozambique

2.    Drive Mozambique to become a Southern African energy hub

3.    Ensure development of sustainable workforce in the energy sector .

This strategy proposed the creation of a new policy instrument called the Electrification Account, which is expected to be fully implemented by the Ministry of Economy and Finance by 2020. This new fund will serve as a subsidy instrument in the event that current electricity tariffs are not sufficient to fund the electrification targets on their own.

To know more about the EDM Strategy visit: https://www.edm.co.mz/sites/default/files/documents/Reports/EDM_STRATEGY_2018_2028.pdf

National Electrification Strategy (ENE) - Energy for All (Programa Nacional de Energia Para Todos)

The Government of Mozambique launched this strategy to provide electricity access to more than 10 million Mozambicans by 2024. This program defines the roles of the four main institutions responsible for reaching the electrification goals: MIREME as a process planner; EDM as the main institution implementing projects to improve energy access within the grid and its expansion; FUNAE as the main body responsible for rural electrification; and the Ministry of Economy and Finance as an allocator of funds for the projects in the scope.

One of the resulting initiatives from this strategy is the renewable energy auction mechanism called Promoçao de Leilões de Energias Renovaveis (“Promotion of Renewable Energy Auctions” -PROLER). PROLER is a public tender model launched in 2018, contracted by MIREME and financially supported by the European Union through the AFD – Agence Française de Développement. The mechanism is a driver for private investment in the development of solar and wind projects to be connected to the National Power Grid. There are three solar PV and one wind power projects covered in PROLER’s schedule. The first solar PV project was launched in October 2020 and for the rest of the projects, viability studies will be carried from 2021 to 2022.

During the African Energy Forum celebrated in June 2022, EDM partnered with the International Finance Cooperation (IFC) from the World Bank Group to develop four solar PV and battery storage facilities with an expected total production of 50 MW. These plants are planned to be part of the National Grid.

For more information about the National Electrification Strategy and PROLER visit: http://proler.gov.mz/wp-content/uploads/2021/01/EDM_Novas-Energias_Brochura_A4.pdf

For more information about the PROLER mechanism and to review the status of current tenders visit PROLER’s main page at: http://proler.gov.mz/

The following table shows a summarized overview of the strategies with goals of development of energy access in Mozambique and the entities that created them.

Implementing Body	Name	Focus	Period
EDM	Electricity Law (Law No. 21/91) - review	Regulation of renewable energy	2017-present
Gov. Of Mozambique EDM	Electric Infrastructures Integrated Master Plan (o Plano Director de Infraestruturas Eléctricas 2018-2043)	Power generation, transmission and distribution planning for 25 years 20% integration of RE into the grid	2018-2043
Gov. Of Mozambique EDM ARENE	National Electrification Strategy (ENE) - Energy for All (Programa Nacional de Energia Para Todos)	“Providing high-quality, affordable and sustainable electricity by 2030” 70% from grid and 30% from off-grid Ensure new energy access for more than 10 000 residents	2018 - 2030

Further Information

• Mozambique- Country Information
• Mozambique Electricity Situation
• Institutional Framework in Mozambique
• Webinar - The new regulation for energy access in off-grid areas in Mozambique" (March 2022)

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