Policy and Regulatory Framework for Mini/Nano Grids in Mozambique

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Policy framework

The following regulations represent the policy framework for the services provided by mini-grids.

  • In July 2022, the new and revised Electricity Law 12/22 was passed to revoke the old Electricity Law from 1997. The purpose of this law is to define the general organization of the electric power sector and the legal regime electric power supply activities. In terms of mini-grids, it specifies the updated criteria to obtain a mini-grid concession[1].
  • Decree n. ° 93/2021. In September 2021, the Government of Mozambique approved a new Regulation for Energy Access in Off-grid Areas, which was officially published on December 10th 2021. This regulation establishes the principles and norms for energy access in off-grid areas using mini-grids and other energy services[2].

Additional actions in the energy policy are an ongoing revision of the Electricity Law and a revision of the energy strategy 2009-2014. The new revision of the Electricity Law will treat mini-grids as specific activities with a simplified licensing process[3] as opposed to previous regulations, where the tendering process for mini-grids were the same as for big utility projects (Decree 48/2007)[4].

Other supporting laws, decrees, and reforms related to the construction and operation of mini-grids are shown below.

  • Decree n. 8/2000, of 20 April 2000 - Regulations on the Powers and Procedures for the Award of concessions, and the import and export of energy. This decree sets the regulations for the installation of power stations granted by the Council of Ministers.
  • Resolution 62/2009 approves the Development Policy on New and Renewable Energies and outlines the government’s plans for the energy sector.
  • Decree no 58/2014 establishes a structure for REFIT in Mozambique and is yet to be implemented
  • Law no 15/2011 establishes the Decree 75/2007 on special economic zones offices establishing the guidelines for the contracting, implementing and monitoring process of public-private partnerships (PPP), large-scale projects and business concessions[5].
  • Decree Nr. 184/2014 includes the technical standards for mini-grids connecting to the national grid.[6]

Regulatory Framework

Tariffs and Subsidies

The new Mozambican Regulation for Energy Access in Off-Grid Areas from 2021 specifies the guidelines for tariff calculations. It states the tariffs must be calculated on the bases of accepted costs and allowed revenues, including the ability to pay of consumers and existing incentives for economic efficiency. The tariff structure will be fixed for each consumer category. Tariffs will be revised and authorised by the Energy Regulation Authority (ARENE).

In 2014, Decree 58/2014 was passed allowing mini-grids to sell excess generated electricity to EDM through the Renewable Energy Feed-in Tariff (REFIT)[7]. The mini-grids can be developed by individuals or cooperatives i.e. either public or privately owned model. To ensure grid interconnection after the grid expansion, the sites must be located not further than 10km from the national grid. Projects outside the 10 km radius are not eligible for REFIT; however these prices could be used as a guideline to calculate services in remote sites. The prices for the REFIT depend on the energy source (biomass, wind, hydro, and solar) and the generation capacity. Although the Mozambican REFIT is not yet operational in 2022, it represents an important energy and climate change policy instrument[8].

The approved tariff structure of REFIT is as follows:

Max. capacity Biomass Tariff (MZN/kWh) Wind Tariff (MZN/kWh) Small Hydro Tariff (MZN/kWh) Solar PV Tariff (MZN/kWh)
10 KW Not applicable 8.00 4.81 13.02
0.5 MW 5.74 Not applicable Not applicable Not applicable
1 MW 5.36           5.61 3.44 10.73
5 MW 4.43 4.65 2.70 8.40
10 MW 4.06 4.12 2.29 7.91          


For a complete list of tariffs and specifications in the Decree 58/2014 click here.

In 2015, the Mozambican Government received a grant from the Sustainable Energy Fund for Africa (SEFA) for the project “Promotion of renewable energy in Mozambique – Enabling Environment.” One of the project’s objective is to create and enable a regulatory framework for mini-grids, including guidelines for grid connection for mini-grids, standardised PPAs for mini-grid, guidelines for investors and technical regulations for mini-grids[9][10]. This new regulatory framework is reflected in the new Regulation for Energy Access in Off-Grid Areas and will be included in the planned new revision of the Electricity Law[3].

Another part of the project aims to explore a tariff proposal for mini-grids that do not qualify for the REFIT pricing due to being located further than 10km from the national grid. The first initiative for this purpose was the electrification of the Titimane village. Additional projects are yet to be announced.

Allocation of mini-grid concessions

As stated in Decree n. °93/2021, the concessions for mini-grids will be allocated through a tender process under the terms of the present public procurement legislation, and the concession contract will be valid for up to 30 years.[11]

In July 2022, Law 12/22 was passed to revoke the old Electricity Law from 1997. The new law specifies the updated criteria to obtain a mini-grid concession, including the following points:

1.     “The establishment of mini-grids, involving the production of electricity with installed power equal to or less than 10MW, requires a concession, under the terms of this Law.

2.     “Mini-grids are exempt from concession fees, without prejudice to the payment of other taxes or fees due under the terms of the law.

3.     “The mechanisms for connection to the National Electricity Grid and for compensation resulting from the expansion of the National Electricity Grid to the location where the mini-grid is installed are defined by regulation”.[12]

Power Purchase Agreements (PPA)

Mozambique’s National Electrification Strategy establishes the operational model of the mini-grids under a PPA. Independent Power Producers (IPPs) investment in mini-grids will be made through public-private partnerships (PPP) between IPPs and EDM; IPPs will be in charge of the investments, construction, and O&M, while EDM will be in charge of service connections and the distribution networks through public investments. FUNAE’s role in these agreements is as the supervisor of implementation activities and the designer of the distribution network infrastructure. The tariff for the mini-grid electricity under these PPAs will be charged to the beneficiaries as it is to regular EDM consumers[13].

As proposed in the SEFA Appraisal Report for the “Promotion of renewable energy in Mozambique – Enabling Environment” project[14], EDM has yet to issue long-term standard PPAs to increase private sector partnerships and undertake financial risks[15].

The private investments into the electricity sector is governed by the Public Private Partnership Law (2011)

Technical and Service Quality Standard

The development of mini-grids must follow specific standards in different areas: electrical design, safety, technology, and energy storage (if existing).

The International Electrotechnical Commission (IEC) created a code of requirements for electrical design in an international level. IEC’s technical standard for mini-grids are defined in a series of documents: IEC Technical Specification Series 62257. IEC’s Technical Committee (TC) 8 offers specifications for rural electrification[16]. While this technical standard covers over 20 countries, Mozambique is currently not a participating country of this standard.

Depending on the renewable energy source powering the mini-grid a different technology standard will be needed. These standards tend to adhere to local agreements within the county by their national standardisation institution. In Mozambique, the institution that fulfils said role is the Instituto Nacional de Normalização e Qualidade (INNOQ). INNOQ is recognised by the International Organization for Standarization (ISO)[17], however it does not have a specific standard for mini-grids. In fact, Mozambique has a national grid code but there are no standards for mini-grids. The standards for mini-grids are an intended part of the SEFA grant and are already mentioned in the new Regulation for Energy Access in Off-grid Areas as part of the requirements to get a concession.

As a guideline for what the standards should cover, the regulation states that the development, operation and management of mini-grids shall comply, among others, with the applicable technical and safety standards on:

  • construction and implementation of mini-grid infrastructure and production facilities
  • construction and implementation of mini-grid distribution networks;
  • operation and maintenance of mini-grids;
  • frequency, voltage and harmonic variations;
  • number and duration of power supply interruptions;
  • current or future interconnection to the national grid

In terms of service quality and commercial relation standards for end consumers, the regulation states that the operation and management of mini-grids shall comply with the following:

  • Obligation to connect final consumers to the mini-grid within the concession area and according to the operating plan;
  • Model contract to be signed
  • Connection processes and deadlines;
  • Energy metering and billing;
  • Model bill, billing deadlines, delivery of bill and cases of non-payment
  • Invoice model, invoicing deadlines, delivery of invoice and cases of non-payment;
  • Suspension of supply; and
  • Complaint procedure and duty of information

Further details about the standards are not specified in the regulation[18].


In terms of connectivity to the national grid, mini-grid projects need to adhere to the technical standards of the National Grid Electricity Code as stated in the Ministerial Decree Nr. 184/2014[19].


Programmes like BRILHO are referring to international framework such as the US Department of Energy National Renewable Energy Laboratory (NREL) QA Framework.[20]

Further Information


References

  1. ↑ ‘Lei-12_2022-Lei-de-Electricidade.Pdf’. Accessed 2 August 2022. https://www.lerenovaveis.org/contents/lerpublication/lei-12_2022-lei-de-electricidade.pdf
  2. ↑ Decreto-NÂo-93-2021-de-10-de-Dezembro-de-2021-Aprova-o-Regulamento-de-Acesso-Ã-Energia-Nas-Zonas-Fora-Da-Rede.Pdf’. Accessed 19 January 2022. https://amer.org.mz/wp-content/uploads/2021/12/Decreto-nA%CC%82o-93-2021-de-10-de-Dezembro-de-2021-Aprova-o-Regulamento-de-Acesso-A%CC%83-Energia-nas-Zonas-Fora-da-Rede.pdf.
  3. ↑ 3.0 3.1 AMER Mini-Grids  Sessão A. Accessed 12 August 2021. https://www.youtube.com/watch?v=rrLYseQua7Y.
  4. ↑ Business Environment Constraints in Mozambique’s Renewable Energy Sector: Solar PV Systems and Improved Cook Stoves’, n.d., 59.
  5. ↑ Law No. 15/2011 Establishing the Guidelines for the Contracting, Implementing and Monitoring Process of Public-Private Partnerships, Large-Scale Projects and Business Concessions.’, accessed 8 September 2021, https://www.ecolex.org/details/legislation/law-no-152011-establishing-the-guidelines-for-the-contracting-implementing-and-monitoring-process-of-public-private-partnerships-large-scale-projects-and-business-concessions-lex-faoc165015/.
  6. ↑ Mozambique – GET.Invest’, accessed 31 May 2021, https://www.get-invest.eu/market-information/mozambique/.
  7. ↑ Decreto n.o 58/2014’, accessed 6 August 2021, http://extwprlegs1.fao.org/docs/pdf/moz185558.pdf.
  8. ↑ Emília Inês Come Zebra et al., ‘Assessing the Greenhouse Gas Impact of a Renewable Energy Feed-in Tariff Policy in Mozambique: Towards NDC Ambition and Recommendations to Effectively Measure, Report, and Verify Its Implementation’, Sustainability 13, no. 10 (January 2021): 5376, https://doi.org/10.3390/su13105376.
  9. ↑ African Development Bank, ‘Mozambique - Promotion of Renewable Energy in Mozambique - Enabling Environment - SEFA Appraisal Report’, Text, African Development Bank - Building today, a better Africa tomorrow (African Development Bank Group, 22 December 2020), https://www.afdb.org/en/documents/mozambique-promotion-renewable-energy-mozambique-enabling-environment-sefa-appraisal-report.
  10. ↑ DevelopmentAid’, DevelopmentAid, accessed 6 September 2021, https://www.developmentaid.org/.
  11. ↑ Decreto-NÂo-93-2021-de-10-de-Dezembro-de-2021-Aprova-o-Regulamento-de-Acesso-Ã-Energia-Nas-Zonas-Fora-Da-Rede.Pdf’.
  12. ↑ Lei-12_2022-Lei-de-Electricidade.Pdf’, accessed 2 August 2022, https://www.lerenovaveis.org/contents/lerpublication/lei-12_2022-lei-de-electricidade.pdf.
  13. ↑ ‘Mozambique Energy for All ProEnergia Project.Pdf’, accessed 14 June 2021, https://documents1.worldbank.org/curated/pt/594061554084119829/pdf/Mozambique-Energy-for-All-ProEnergia-Project.pdf.
  14. ↑ Bank, ‘Mozambique - Promotion of Renewable Energy in Mozambique - Enabling Environment - SEFA Appraisal Report’.
  15. ↑ ‘IRENA - Renewables Readiness Assessment: Mozambique’, accessed 10 August 2021, https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2013/IRENA-Mozambique-RRA.pdf.
  16. ↑ IEC - TC 8 Dashboard> Scope’, accessed 10 August 2021, https://www.iec.ch/dyn/www/f?p=103:7:404603576950327::::FSP_ORG_ID,FSP_LANG_ID:1240,25.
  17. ↑ ‘INNOQ’, ISO, accessed 10 August 2021, https://www.iso.org/cms/render/live/en/sites/isoorg/contents/data/member/00/19/1978.html.
  18. ↑ Decreto-NÂo-93-2021-de-10-de-Dezembro-de-2021-Aprova-o-Regulamento-de-Acesso-Ã-Energia-Nas-Zonas-Fora-Da-Rede.Pdf’.
  19. ↑ ‘Mozambique – GET.Invest’. Accessed 31 May 2021. https://www.get-invest.eu/market-information/mozambique/.
  20. ↑ BRILHO, ‘BRILHO: Guidelines for Applicants - MDF, Call for Expressions of Interest’, 2021, https://brilhomoz.com/assets/documents/HD_BRILHO_Booklet_EN_A4_Digital.pdf.
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