Difference between revisions of "Mozambique Energy Situation"

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= <span><font size="5">1</font><span>&nbsp;&nbsp;&nbsp;&nbsp; </span></span><font size="5">Energy Sector</font> =
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{{CES Country|CES Country Name=Mozambique
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|CES Country Capital=Maputo
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|CES Country Region Africa=Sub-Saharan Africa
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|CES Country Coordinates=25.9500° S, 32.5833° E
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}}
  
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Power generation in Mozambique is dominated by the hydroelectric facility Cahora Bassa, located on the Zambezi River in western Mozambique. It contributes to 87% of the 2,400<span> MW production capacity in the country although four fifth are exported to South Africa and Zimbabwe. Hydropower is most important in terms of resources – it disposes of an estimated potential of 12.5 GW. The second major renewable energy potential lies in solar energy, since Mozambique is located in the so-called “sunbelt” with a relatively high but yet unused solar radiation capacity.</span> Wind energy has less potential and is reportedly limited to isolated areas with average winds above 2.2 m/s in Maputo, some coastal areas of Beira and Quelimane and some parts of Tete and Niassa, where the main potential use is for wind-driven water pumps.
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{{back button|Mozambique Off-grid Knowledge Hub|Mozambique Off-grid Knowledge Hub}}
  
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The current capacity of 2,400<span> MW will be supplemented with 550 MW and 2,500 MW from the Cahora Bassa North and Uncuna Hydro stations when they become operational in 2011. A 1,000 MW Thermal Unit powered by natural gas is also planned for the Moatize coal production area.</span>
 
  
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Mozambique is self-sufficient in energy with the exception of liquid fuels. Despite the extensive modern resources, biomass is by far the country’s predominant energy source. Firewood and charcoal (woodfuels) are used by over 95% of the rural households – and by 85% of the total households.
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=Introduction=
  
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While the energy consumption is dominated by the consumption of biomass, only 8.2% of the population had access to electricity in 2006 (with an increase of 6.8% in comparison to the previous year) and an estimation of 10% in 2008. In 2006 the electrification rate at urban areas was about 20% while at rural areas it was about 1-2% of the population. In 2006 the maximum peak of the electricity system was 320 MW and the maximum peak in the Southern system was 216 MW.  
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The Republic of Mozambique is located on the south-eastern coast of Africa and has a surface area of 801,590 square kilometres. It is bordered by South Africa, Swaziland, Zimbabwe, Zambia, Malawi, Tanzania, and separated by the Indian Ocean from Madagascar. The country is divided into ten provinces, and a provincial capital city (see Map: Provinces in Mozambique). It is one of the poorest countries in the world, and the 7th poorest in Africa with a GDP per capita of USD 1281 (2019), a total GDP of USD 14.96 billion (2019), and an annual GDP growth of 3.11% (2018). <br />Mozambique has undertaken significant efforts in recent years to electrify the country. The electrification rate has increased from 5% in 2001 to 29% in 2019<ref>World Bank, ‘Mozambique | Data’. <nowiki>https://data.worldbank.org/indicator/EG.ELC.ACCS.UR.ZS?locations=MZ</nowiki></ref>. In 2022, it increased to 44%<ref>S.Excia Eng. Carlos Zacarias - Ministro dos Recursos Minerais e Energia (MIREME). 2022. CDD Just Energy Transition.  
  
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Mozambique is a vast country with a low population density of 27 per square kilometre. It is therefore expensive to distribute any commercial form of energy. Considering grid connection fees of 3,500 MZM (146 US$) and an income per capita of 310 US$ in 2008 (WB 2008), electricity is unaffordable for most part of the population especially due to the prohibitive up-front costs.  
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https://www.youtube.com/watch?v=3GphYhRJq50</ref> from 34% in 2020.<ref>Renewables in Mozambique (2021):https://www.lerenovaveis.org/contents/lerpublication/aler_mar2021_resumo-renovaveis-em-mocambique-2021.pdf</ref> Access to electricity, however, remains low and is mainly focused on urban areas. In 2019, 72% of the urban population had access to electricity compared to 5% of the rural population. <ref>World Bank, ‘Mozambique | Data’. <nowiki>https://data.worldbank.org/indicator/EG.ELC.ACCS.UR.ZS?locations=MZ</nowiki></ref>This imbalance represents an important challenge to achieving country-wide electrification by 2030, considering that the vast majority (63% in 2019) of Mozambique’s population lives in rural areas.<ref name=":0">Mozambique: Energy and the Poor’, K. Naidoo, C. Loots, 2020, <nowiki>https://sun-connect-news.org/fileadmin/DATEIEN/Dateien/New/2021-01-29_UNDP-UNCDF-Mozambique-Energy-and-the-Poor.pdf</nowiki>.</ref>
  
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== <span><font size="3">1.1</font><span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span><font size="3">Electricidade de Moçambique (EdM)</font> ==
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The national grid including off grid facilities is claimed to reach some 30&nbsp;% of the country today in terms of numbers of people with potential access to the grid (not connected). Many district capitals depend on expensive and often unreliable power generation with diesel generators. Outside these towns, the situation is even worse. The overwhelming majority of rural households, most rural schools, health centres and administrative posts are without access to electricity. Lack of mechanical power is a bottleneck for the rural subsistence agricultural production, as grain producers have to walk long distances to the nearest milling facility. Rural areas lack electricity for lighting, radio and communication in households and for refrigeration in small commerce. Nevertheless, many rural household spend a considerable share of their income for modern energy in the form of kerosene or batteries (€ 4–5 per month). Lack of access to electricity restricts the local population’s opportunities for income-generating activities.<br />The energy sector is key to the country's economy already today, since energy exports make up a large share of total foreign exchange earnings. Moreover, the availability of cheap electricity is one of the main reasons for the significant foreign direct investment in energy-intensive industries in Mozambique. Energy exports (hydropower, coal, gas and possibly oil) and projects to cover the growing domestic electricity demand will play an increasingly important role in the years to come. The liberalisation of the power sector initiated in 1997 allowed for third parties from the private sector to enter the power generation, transmission and distribution markets without impressive results so far (2012).<br /><span style="mso-ansi-language:DE" lang="DE"></span>[[Mozambique Energy Situation#toc|►Go to Top]]
  
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The most relevant institution in the energy sector is Electricidade de Moçambique (EdM) which is responsible for the transport, distribution and commercialisation of electricity in Mozambique. EdM is the Mozambican national utility transformed from a state monopoly to a public enterprise in 1995. Nowadays it is a government owned corporation. EdM controls the national grid network and the limited liability company PETROMOC (Mozambican State Company for Petroleum) which administrates petroleum products. The liberalisation of the power sector initiated in 1997 allowed for third parties from the private sector to enter the market.  
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==Potentials ==
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Mozambique has considerable energy resources with an estimated hydropower potential of 12,000 MW and also gas reserves (estimated at reaching 700 billion cubic metres) and vast coal reserves (estimated to reach 140 million TJ) with the potential of generating approx. 500 MW and 5,000 MW respectively. Regarding solar, it has about 23 TW capacity, out of which 2.7 GW could easily be harnessed<ref name="BERF (2016). Business environment constraints in Mozambique’s Renewable Energy Sector: Solar PV Systems and Improved Cook Stoves, Business Environment Reform Facility, UK Department of International Development. https://assets.publishing.service.gov.uk/media/5c76b459ed915d3547d50a07/Final_BERF-Mozambique-Renewable-Energy-8th-Dec2016.pdf">BERF (2016). Business environment constraints in Mozambique’s Renewable Energy Sector: Solar PV Systems and Improved Cook Stoves, Business Environment Reform Facility, UK Department of International Development. https://assets.publishing.service.gov.uk/media/5c76b459ed915d3547d50a07/Final_BERF-Mozambique-Renewable-Energy-8th-Dec2016.pdf</ref>.
  
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EdM applies a uniform tariff structure throughout the country, which implies cross-subsidisation from the much more lucrative Southern region to the poor and remote regions in Central Mozambique and especially the North. There, electricity supply and distribution is more expensive than the tariff charged due to long distances and low customer density combined with low consumption per customer.  
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A National Policy and Strategy for Biofuels was approved in February 2009 which focuses on ethanol from sugarcane and sorghum and coconut and jatropha for biodiesel. This policy has led to hundreds of millions of dollars in investment plans in ethanol and biodiesel in Mozambique. In October 2007 ethanol plant in Mozambique received US$510 million in support from the UK. However, the actual on-the-ground activity is unclear and production has yet to commence. Biofuels are not readily available in the country and export details are also not available<ref name="The biofuels sector, and especially the biodiesel sector, has attracted considerable investment. Hundreds of millions of dollars of investment has been made. Much of this has been in the sugar sector which is growing rapidly. At least 7 biodiesel/jatropha plantations have been set up with poor -- and controversial – results. (see Justica Ambiental!/Uniao Nacional de Camponeses, Jatropha: A Socio-economic pitfall for Mozambique. August 2009. http://ictsd.org/i/news/biores/45169/">The biofuels sector, and especially the biodiesel sector, has attracted considerable investment. Hundreds of millions of dollars of investment has been made. Much of this has been in the sugar sector which is growing rapidly. At least 7 biodiesel/jatropha plantations have been set up with poor -- and controversial – results. (see Justica Ambiental!/Uniao Nacional de Camponeses, Jatropha: A Socio-economic pitfall for Mozambique. August 2009. http://ictsd.org/i/news/biores/45169/</ref>.
  
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== <span><font size="3">1.2</font><span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span><font size="3">Problem Situation</font> ==
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'''[[Mozambique Renewable Energy Potential|Click here to read more about the RE potential in Mozambique]]'''.
  
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Access to electricity is among the lowest in the world, especially in rural areas where only 1-2% of the population is supplied. Access to electricity in the capital Maputo amounting to 38% of the population, in the Southern Province close to Maputo (Maputo Province and Gaza) accounting for 10% of the population and in the Central Province Sofala (where the second biggest city Beira is located) accounting for 8.4% of the population is much higher than in the other more rural provinces.
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[[Mozambique Energy Situation#toc|►Go to Top]]
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==Renewable Energy Potential==
  
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As for electrification of the provincial capitals, in 2007 Mozambique had all 11 provincial capitals connected to the national grid, drawing power from Cahora Bassa. But of the 128 districts, in 2007 there was permanent electricity in only 60 of them, deriving from either the national grid or that of neighbouring states such as Malawi and Zimbabwe. Furthermore the people in the district capital often depend on expensive and sometimes unreliable power generation with diesel generators, supplying electricity for a limited number of hours per day. Outside these towns, the situation is even worse. Apart from the overwhelming majority of rural households, most rural schools, health centres and administrative posts are without access to electricity.  
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{| style="width: 100%" cellspacing="1" cellpadding="1" border="1"
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|-
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! scope="col" |Resource
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! scope="col" |Availability
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! scope="col" |Total Potential
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|-
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|Wind
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|Along the coasts (Speeds between 4 - 6 m/s at 80m height)<br />
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| 4.5 GW<ref>Recurso Eólico’, accessed 24 June 2021, <nowiki>https://www.funae.co.mz/index.php/pt/recursos/recurso-eolico</nowiki></ref>
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|-
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|Solar
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|4.5-7 kWh/m2/day
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|2.7 GW<ref>Pranab Baruah and Brendan Coleman, ‘Country Brief: Mozambique Off-Grid Solar Power in Mozambique: Opportunities for Universal Energy Access and Barriers to Private Sector Participation’, n.d., 26.</ref>
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|-
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|Hydro
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|12 GW (1 GW in small installations up to 10 MW)
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| 12 000 MW
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|-
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|Biomass
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|100's of MW (Big biogas potential)
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|2 GW biomass potential<ref>GET.invest, ‘Renewable Energy Potential – GET.Invest’, accessed 21 April 2021, <nowiki>https://www.get-invest.eu/market-information/mozambique/renewable-energy-potential/</nowiki></ref>
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|}
  
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Nevertheless, as a recently executed baseline found out many households spend a considerable share of their income for energy in the form of kerosene, batteries and charcoal. At Matola area poor households spent 22% of their total expenditures and about 12 € on energy per month. In the more rural area Chua (Manica Province) the households spent 12% of their total expenditures and about 5 € on energy per month. Lack of access to electricity restricts the local population’s opportunities for income-generating activities. Therefore, energy is frequently mentioned as a key constraint to local development by the actors involved in participative development planning.  
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[[Mozambique Renewable Energy Potential|'''Click here to read more about the RE potential in Mozambique.''']]
  
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In 2008 the Minister of Energy Namburete declared the hope of the Mozambican government that there would be permanent electricity in 108 district capitals by 2010. Furthermore he pronounced the hope for an average of 70,000 new electricity connections a year over the following years.
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[[Mozambique Energy Situation#toc|►Go to Top]]
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==Electricity Generation and Consumption==
  
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= <span><font size="5">2</font><span>&nbsp;&nbsp;&nbsp;&nbsp; </span></span><font size="5">Institutional and political Environment</font> =
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Mozambique has a total installed capacity of 2,780 MW (2020). The projections for 2030 from the Power Sector Master Plan show an expected increase in the total installed capacity to 6,001 MW. Hydropower is the dominating electricity source with 2,189 MW, 79% of the total energy mix, followed by 442 MW from gas (16%), 108 MW from heavy fuel oil (HFO) (4%) and 41 MW from solar (1%) (2020).<ref>Aler_mar2021_resumo-Renovaveis-Em-Mocambique-2021.Pdf’, accessed 23 April 2021, <nowiki>https://www.lerenovaveis.org/contents/lerpublication/aler_mar2021_resumo-renovaveis-em-mocambique-2021.pdf</nowiki></ref>
  
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== <span><font size="3">2.1</font><span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span><font size="3">Main actors</font> ==
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There are six working hydropower stations across the country. The largest hydroelectric plant is located in the Tete province and is operated by Hidroeléctrica de Cahora Bassa (HCB).<ref>Mozambique: Energy and the Poor’, K. Naidoo, C. Loots, 2020, <nowiki>https://sun-connect-news.org/fileadmin/DATEIEN/Dateien/New/2021-01-29_UNDP-UNCDF-Mozambique-Energy-and-the-Poor.pdf</nowiki>.</ref> HCB is responsible for most of the hydroelectric generation, with a capacity of 2,075 MW. In 2014, it supplied up to 88% of the power consumed in Mozambique.<ref>EDM, Integrated Master Plan 2018-2043,<nowiki>https://www.edm.co.mz/en/document/reports/integrated-master-plan-2018-2043</nowiki></ref> Due to the low electricity demand (peak demand in 2014 was estimated at only 831 MW) resulting from scarce energy access in Mozambique, the majority of the generation from HCB is exported to South Africa. Smaller shares are exported to Zimbabwe and Botswana. <ref name=":0" />
  
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<span>·<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span>'''''The National Directorate of Energy (Direcção Nacional de Energia – DNE)''''' in the '''''Ministry of Energy (MIREME – Ministério da Energia)''''', formulates overall energy planning and policy. The basic working document of the Directorate is the '''''National Energy Sector Strategy''''' established by decree 24/2000. The Mozambican Ministry of Energy still supervises the EdM as to its responsibilities concerning the generation, transmission and distribution of electricity.  
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The table below shows the most recent energy indicators reported by the IEA. In 2018, the total primary energy supply was 10.43 Mtoe, from a total of 20.23 Mtoe produced that year. Final electricity consumption was only 13.63 TWh, however, this number has increased drastically by more than 2000% since 1990.<ref>IEA, ‘Mozambique - Countries & Regions’ <nowiki>https://www.iea.org/countries/mozambique</nowiki></ref>
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{| class="wikitable"
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|+'''Table: Mozambique’s key energy indicators'''
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|Energy production
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|20.23  Mtoe
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|-
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|Total  primary energy supply
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|10.43  Mtoe
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|-
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|Total  electricity consumption
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|13.63  TWh
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|-
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|Electricity  consumption per capita
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|0.5  MWh
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|}
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'''[[Mozambique Electricity Situation|For more information about generation and consumption of electricity in Mozambique, please click here.]]'''
  
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Under the 1997 reform programme two new institutions have been created:
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[[Mozambique Energy Situation#toc|►Go to Top]]
  
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<span>·<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span>'''''The National Electricity Council (Conselho Nacional de Electricidade – CONELEC)''''' was created in 2004 based on the energy reform of the late 1990. It mediates and arbitrates differences arising with energy supply policy, projects, concession requests etc. Although the Ministry of Energy still retains control of the high voltage transmission system and mini grids, CONELEC becomes more and more autonomy and acts independently from the Ministry. Further regulatory action is provided by the Southern Africa Power Pool (SAPP) which regulates all cross border power transactions in the region.
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<br />
  
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<span>·<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span>'''''The National Energy Fund (Fundo Nacional de Energia – FUNAE)''''' was created in 1997. FUNAE focuses mainly on renewable energy technologies and rural electrification. Its main purpose is to disseminate low-cost energy services by mobilising funds and providing loans in order to benefit low-income populations. It has funded numerous projects and continues to assist the private sector and NGOs with regards to information required for entering the energy sector in Mozambique. FUNAE used to be financed by DANIDA that are prepared to pull out their activities by now.
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==Noteworthy Trends==
  
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<span>·<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span>'''''The National Directorate of New and renewable Energies ('''''<b>''Direcção Nacional das Energias Novas e Renoavais<span> – DNENR)</span>''</b> and the National Energy Fund (FUNAE) are actively promoting the development and use of renewable energy technologies through funding and policy.
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<span lang="en-us"><span>Despite its </span>large renewable energy resources, the country energy sector focus is on large hydro projects in the Zambezi Basin (i.e. Mphanda Nkuwa) to produce power for export to South Africa and for industry. Mozambique relies heavily on the export of commercial electricity to South Africa from the Cahora Bassa dam on the Zambezi River to generate foreign exchange income.</span>
  
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== <span><font size="3">2.2</font><span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span><font size="3">Legal Framework</font> ==
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The two immediate projects are the 850 MW (nominal) expansion of the Cahora Bassa dam and the controversial Mphanda Nkuwa dam (2500 MW). See table below.
  
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The legal energy policy and planning framework in Mozambique is comprised of five documents.
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{| style="width: 100%" cellspacing="0" cellpadding="0" border="1"
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|-
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| style="width: 213px; vertical-align: top" |
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'''Project Name Type of Project'''
  
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<span>·<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span>The '''''National Energy Policy (1998)''''' is published by decree 5/98. This document focuses on energy in terms of economic growth and tackles issues with suppliers, access and availability of energy to inhabitants, reforestation, investment, efficiency and a more competitive business sector. It promotes institutional capacity building, exports of energy products and more efficient, dynamic and competitive business sector.
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| style="width: 213px; vertical-align: top" |
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'''Size'''
  
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<span>·<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span>The '''''National Energy Sector Strategy (2000)''''' established by decree 24/2000 attempts to transform the intentions in the energy policy into actions.
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| style="width: 213px; vertical-align: top" |
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'''Comments'''
  
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<span>·<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span>'''''Rural Electrification Strategy Plan (2000)''''' is a Norwegian study which currently serves as an official guide to the rural electrification of Mozambique. It raises direct poverty-energy linkages, starting with the recognition of both low per capita incomes and the fact that biomass is by far the largest energy source for the population. It acknowledges the importance of a crosscutting approach stating that initiatives in the sphere of energy will support programmes and investments aimed at increasing the income of the population as well as satisfying health, education and water supply requirements.
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|-
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| style="width: 213px; vertical-align: top" |
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CB North Bank Hydropower expansion
  
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<span>·<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span>'''''Implementation Plan and Final Report of the Rural Electrification Strategy Plan (2001)'''''presents three types of technical energy supply alternatives (grid extension, local isolated grids and stand-alone systems). It assesses and compares a variety of energy resources – grid electrification, diesel generation, small hydropower, PV, wind, biomass, hybrid systems and batteries – and identifies their bottlenecks.
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| style="width: 213px; vertical-align: top" |
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850 to 1300 additional MW
  
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<span>·<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span>'''''The Electricity Act 21/1997''''' allows for private participation in the electricity sector and also defines the national transmission network.
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| style="width: 213px; vertical-align: top" |
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Detailed feasibility study is underway
  
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In addition there are the Poverty Reduction Action Plans I and II who are defining a governmental strategy in order to alleviate poverty in Mozambique. Although those documents are gradually revealing more sensitivity to the energy dimension of poverty there is still no thorough analysis leading to a coherent strategy and appropriate pro-poor approaches and programmes.
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|-
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| style="width: 213px; vertical-align: top" |
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Mphanda Nkuwa Hydropower
  
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'''''Government Five-Year Programme 2000-2004'''''<b>: </b>Its main objectives is reducing absolute poverty through social services, rural development, and rapid and sustainable economic growth development mainly in the rural areas. Twelve of the 15 priority energy actions involve electricity. The remaining three are (i) expanding rural access (ii) diversification of energy sources to promote sustainability, including biomass and (iii) more widespread distribution of kerosene.
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| style="width: 213px; vertical-align: top" |
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2500 MW
  
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The'''''Action Plan for the Reduction of Absolute Poverty (PARPA) 2001-2005'' '''promotes the reduction of environmental impacts of non-renewable resources, reliable energy supplies for economic growth and new and renewable energy sources in the electrification of remote areas. Furthermore it stresses the importance of electrification of districts with economic potential and of private sector participation in the energy field.  
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| style="width: 213px; vertical-align: top" |
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Env. + Soc. Impact Study underway
  
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The'''''Action Plan for the Reduction of Absolute Poverty II (PARPA II)'''''establishes target number for people provided with access to electricity in the future. It also deals with the issue of intensifying CONELEC’s work. The targeted outcomes until 2009 are:  
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|-
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| style="width: 213px; vertical-align: top" |
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Massingir Hydropower
  
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<span>·<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span>CONELEC operates efficiently
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| style="width: 213px; vertical-align: top" |
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40 MW
  
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<span>·<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span>800,000 people – access rate of 12% – are provided with new and sustainable access to modern energy
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| style="width: 213px; vertical-align: top" |
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EDM managed
  
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<span>·<span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span>and 500 of new institutions are provided with sustainable access to modern energy outside the grid.
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|-
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| style="width: 213px; vertical-align: top" |
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Lurio Hydropower
  
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Until the end of November AMES-M contributed sustainable access to modern energy for 27,323 people to the targeted number of PARPA II.
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| style="width: 213px; vertical-align: top" |
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120 MW
  
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= <span><font size="5">3</font><span>&nbsp;&nbsp;&nbsp;&nbsp; </span></span><font size="5">Activities of other stakeholders and donors</font> =
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| style="width: 213px; vertical-align: top" |
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<br />
  
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The most activities are executed in the field of electrification. Danida, Norway/SIDA, World Bank and AFD have activities in generation, transmission or distribution of electricity.
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|-
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| style="width: 213px; vertical-align: top" |
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Majawa Hydropower
  
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Furthermore World Bank and AFD have some programmes in the field of transmission and distribution of electricity. All of them are active in the area of rural electrification as well.
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| style="width: 213px; vertical-align: top" |
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25 MW
  
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Grid based activities are supported by the two main programmes Energy Reform and Access Project (ERAP) and Electricity Project (EP).
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| style="width: 213px; vertical-align: top" |
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<br />
  
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In addition DANIDA through FUNAE, the World Bank through the ERAP program and the Spanish cooperation as well as UNIDO works with renewable energy and Solar PV at rural areas. Furthermore some donors give consultancies to important institution such as EdM, DIPREME, DNE, FUNAE and CONELEC. The Norway Cooperation and AFD support the development of the oil and gas field. ADF is financing the Pande and Temane projects by a loan.
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|-
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| style="width: 213px; vertical-align: top" |
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Malema Hydropower
  
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Besides FUNAE and the Swedish International Development Agency who are supposed to fund hydropower plants, there are no major activities of other donors in the field of Pico and Hydro Power. Next to the Pico Hydropower project at Chua no other project has started yet.
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| style="width: 213px; vertical-align: top" |
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60 MW
  
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&nbsp;  
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| style="width: 213px; vertical-align: top" |
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<br />
  
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At the moment some changes are taking place regarding the donor intervention: DANIDA’s Energy Sector Programme Support (ESPS) in Mozambique phased out in 2008. It comprised Support to the National Energy Sector Institutions, to the National Electricity Operator (EdM)<br>and to Decentralised Energy Management. From the current year on it will be concentrating its activities more on climate and environmental issues. SIDA will be working with the Ministry of Energy and NORAD with EdM. There is no donor who would take over the support of FUNAE that was provided by DANIDA before. However, FUNAE receives funding from several sources as the European Union, the World Bank, the Spanish Cooperation and others.
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|-
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| style="width: 213px; vertical-align: top" |
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Moatize Coal fired power plant
  
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= [[|<span style="mso-fareast-font-family: arial; mso-bidi-font-family: arial"><span style="mso-list: ignore"><font face="Arial" size="5">2</font><span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><font face="Arial" size="5">Institutional and political Environment</font>]] =
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| style="width: 213px; vertical-align: top" |
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1500 MW
  
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== [[|<span style="mso-fareast-font-family: arial; mso-bidi-font-family: arial"><span style="mso-list: ignore"><font face="Arial" size="3">2.1</font><span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><font face="Arial" size="3">Main actors</font>]]<font face="Arial" size="3"></font>  ==
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| style="width: 213px; vertical-align: top" |
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IES is the developer
  
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<span lang="EN-GB" style="font-family: symbol; mso-fareast-font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><font face="Arial">'''''<span lang="EN-GB" style="mso-ansi-language: en-gb">The National Directorate of Energy (Direcção Nacional de Energia – DNE)</span>'''''<span lang="EN-GB" style="mso-ansi-language: en-gb"> in the '''''Ministry of Energy (MIREME – Ministério da Energia)''''', formulates overall energy planning and policy. The basic working document of the Directorate is the '''''National Energy Sector Strategy''''' established by decree 24/2000. The Mozambican Ministry of Energy still supervises the EdM as to its responsibilities concerning the generation, transmission and distribution of electricity.</span></font>
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Temane Combined Cycle natural gas fired power plant
  
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<span lang="EN-GB" style="mso-ansi-language: en-gb"><font face="Arial">Under the 1997 reform programme two new institutions have been created:</font></span>
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300-400 MW
  
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<span lang="EN-GB" style="font-family: symbol; mso-fareast-font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><font face="Arial">'''''<span lang="EN-GB" style="mso-ansi-language: en-gb">The National Electricity Council (Conselho Nacional de Electricidade – CONELEC)</span>'''''<span lang="EN-GB" style="mso-ansi-language: en-gb"> was created in 2004 based on the energy reform of the late 1990. It mediates and arbitrates differences arising with energy supply policy, projects, concession requests etc. Although the Ministry of Energy still retains control of the high voltage transmission system and mini grids, CONELEC becomes more and more autonomy and acts independently from the Ministry. Further regulatory action is provided by the Southern Africa Power Pool (SAPP) which regulates all cross border power transactions in the region.</span></font>
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On May 2022, USAID and DFC  signed an agreement with EDM to provide a loan of USD 200 m to support the design, construction and operation of the project. <ref>US backs Mozambique’s energy security projects: https://www.esi-africa.com/us-backs-mozambiques-energy-security-projects/</ref>
  
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<span lang="EN-GB" style="font-family: symbol; mso-fareast-font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><font face="Arial">'''''<span lang="EN-GB" style="mso-ansi-language: en-gb">The National Energy Fund (Fundo Nacional de Energia – FUNAE)</span>'''''<span lang="EN-GB" style="mso-ansi-language: en-gb"> was created in 1997. FUNAE focuses mainly on renewable energy technologies and rural electrification. Its main purpose is to disseminate low-cost energy services by mobilising funds and providing loans in order to benefit low-income populations. It has funded numerous projects and continues to assist the private sector and NGOs with regards to information required for entering the energy sector in Mozambique. FUNAE used to be financed by DANIDA that are prepared to pull out their activities by now.</span></font>
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<span lang="EN-GB" style="font-family: symbol; mso-fareast-font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><font face="Arial">'''''<span lang="EN-GB" style="mso-ansi-language: en-gb">The National Directorate of New and renewable Energies (</span>'''''<b>''<span lang="EN-GB" style="mso-ansi-language: en-gb">Direcção Nacional das Energias Novas e Renoavais<span style="mso-bidi-font-weight: bold"> – DNENR)</span></span>''</b><span lang="EN-GB" style="mso-ansi-language: en-gb"> and the National Energy Fund (FUNAE) are actively promoting the development and use of renewable energy technologies through funding and policy.</span></font>
 
  
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== [[|<span style="mso-fareast-font-family: arial; mso-bidi-font-family: arial"><span style="mso-list: ignore"><font face="Arial" size="3">2.2</font><span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><font face="Arial" size="3">Legal Framework</font>]] ==
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As a result of March 2009 Government policy, the biofuels sector is receiving hundreds of millions of dollars in investment (sugar – ethanol, jatropha --- biodiesel). However, production has yet to commence and there is considerable controversy about transparency and food vs. energy.
  
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<span lang="EN-GB" style="mso-ansi-language: en-gb"><font face="Arial">The legal energy policy and planning framework in <st1:place w:st="on"><st1:country-region w:st="on">Mozambique</st1:country-region></st1:place> is comprised of five documents. <o:p></o:p></font></span>
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[[Mozambique Energy Situation#toc|►Go to Top]]
  
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<span lang="EN-GB" style="font-family: symbol; mso-fareast-font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span lang="EN-GB" style="mso-ansi-language: en-gb"><font face="Arial">The '''''National Energy Policy (1998)''''' is published by decree 5/98. This document focuses on energy in terms of economic growth and tackles issues with suppliers, access and availability of energy to inhabitants, reforestation, investment, efficiency and a more competitive business sector. It promotes institutional capacity building, exports of energy products and more efficient, dynamic and competitive business sector. <o:p></o:p></font></span>
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==Market Situation==
  
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<span lang="EN-GB" style="font-family: symbol; mso-fareast-font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span lang="EN-GB" style="mso-ansi-language: en-gb"><font face="Arial">The '''''National Energy Sector Strategy (2000)''''' established by decree 24/2000 attempts to transform the intentions in the energy policy into actions. <o:p></o:p></font></span>
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The market situation for '''photovoltaic (PV)''' and hydro power technologies and services is still in early stages.The off-grid market is identified to be around 4 million households, creating an opportunity for not only electrification but also boosting the local economy. UNEP has estimated that for every 10,000 off-grid houses connection, 30 jobs are created by renewable energy. The jobs could be created in the local manufacturing, distribution and maintenance. Apart from electrification, off-grid can also support other productive uses of electricity especially in the agriculture sector (solar pumping)<ref name="Global Green Growth Institute (2017). Country Brief: Mozambique. Off-grid solar power in Mozambique: Opportunities for universal energy access and barriers to private sector participation. https://sun-connect-news.org/fileadmin/DATEIEN/Dateien/New/Country-Brief-Mozambique.pdf">Global Green Growth Institute (2017). Country Brief: Mozambique. Off-grid solar power in Mozambique: Opportunities for universal energy access and barriers to private sector participation.fckLRfckLRhttps://sun-connect-news.org/fileadmin/DATEIEN/Dateien/New/Country-Brief-Mozambique.pdf</ref>.
  
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<span lang="EN-GB" style="font-family: symbol; mso-fareast-font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><font face="Arial">'''''<span lang="EN-GB" style="mso-ansi-language: en-gb">Rural Electrification Strategy Plan (2000)</span>'''''<span lang="EN-GB" style="mso-ansi-language: en-gb"> is a Norwegian study which currently serves as an official guide to the rural electrification of <st1:place w:st="on"><st1:country-region w:st="on">Mozambique</st1:country-region></st1:place>. It raises direct poverty-energy linkages, starting with the recognition of both low per capita incomes and the fact that biomass is by far the largest energy source for the population. It acknowledges the importance of a crosscutting approach stating that initiatives in the sphere of energy will support programmes and investments aimed at increasing the income of the population as well as satisfying health, education and water supply requirements. <o:p></o:p></span></font>
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The private sector is underdeveloped in Mozambique and until 2018, only 25 business were either active or were inclined to enter the market in near future. These businesses are mostly dependent on public tender and donor initiatives. However, the informal off-grid solar products market is thriving in Mozambique with products imported from South Africa, Tanzania or China. This could be because Mozambique has a higher import duty and VAT on PV and ICS as compared to other sub-Saharan countries such as Ethiopia, Ghana or Tanzania. These products in the informal market enter via informal channels and do not pay the import taxes<ref name="Lighting Global (2018):Off-Grid Solar Market Assessment in Mozambique https://www.lightingafrica.org/wp-content/uploads/2019/07/Mozambique_off-grid-assessment.pdf">Lighting Global (2018):Off-Grid Solar Market Assessment in MozambiquefckLRfckLR https://www.lightingafrica.org/wp-content/uploads/2019/07/Mozambique_off-grid-assessment.pdf</ref>.
  
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<span lang="EN-GB" style="font-family: symbol; mso-fareast-font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><font face="Arial">'''''<span lang="EN-GB" style="mso-ansi-language: en-gb">Implementation Plan and Final Report of the Rural Electrification Strategy Plan (2001) </span>'''''<span lang="EN-GB" style="mso-ansi-language: en-gb">presents three types of technical energy supply alternatives (grid extension, local isolated grids and stand-alone systems). It assesses and compares a variety of energy resources – grid electrification, diesel generation, small hydropower, PV, wind, biomass, hybrid systems and batteries – and identifies their bottlenecks.<o:p></o:p></span></font>
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The Improved Cookstove (ICS) market in Mozambique is small and is categorized by mostly donor/NGOs initiatives. Up until March 2020, there were 10-15 companies supplying ICS stoves (charcoal and fuelwood) in the Mozambique market compared to 4 ICS suppliers in 2018. Some of the companies include: MozCarbon, ENI,  ICEMA LDA, Sogepal and Pamoja Moçambique. For the ICS supply chain, two-step distribution chain i.e. producers to consumers is most common but many companies are also expanding the distribution chain to reach consumers outside the capital city, Maputo.<ref>EnDev, ‘Workshop Energy Market Scorecard Mozambique ICS 2020’</ref>
  
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<span lang="EN-GB" style="font-family: symbol; mso-fareast-font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><font face="Arial">'''''<span lang="EN-GB" style="mso-ansi-language: en-gb">The Electricity Act 21/1997</span>'''''<span lang="EN-GB" style="mso-ansi-language: en-gb"> allows for private participation in the electricity sector and also defines the national transmission network. <o:p></o:p></span></font>
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For green mini grid, the tendering process is similar as big energy projects and this increases the complexity for obtaining a concession contact, especially for local businesses. However, the government is promoting mini-grids for public spaces such as health centres, schools and water pumping for community and agricultural purposes<ref name="BERF (2016). Business environment constraints in Mozambique’s Renewable Energy Sector: Solar PV Systems and Improved Cook Stoves, Business Environment Reform Facility, UK Department of International Development. https://assets.publishing.service.gov.uk/media/5c76b459ed915d3547d50a07/Final_BERF-Mozambique-Renewable-Energy-8th-Dec2016.pdf">BERF (2016). Business environment constraints in Mozambique’s Renewable Energy Sector: Solar PV Systems and Improved Cook Stoves, Business Environment Reform Facility, UK Department of International Development. https://assets.publishing.service.gov.uk/media/5c76b459ed915d3547d50a07/Final_BERF-Mozambique-Renewable-Energy-8th-Dec2016.pdf</ref>. There is also a new regulation which has provisions for green mini-grids but it is still unclear how they will be implemented on the ground. <ref>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</ref>
  
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<span lang="EN-GB" style="mso-ansi-language: en-gb"><font face="Arial">In addition there are the Poverty Reduction Action Plans I and II who are defining a governmental strategy in order to alleviate poverty in <st1:place w:st="on"><st1:country-region w:st="on">Mozambique</st1:country-region></st1:place>. Although those documents are gradually revealing more sensitivity to the energy dimension of poverty there is still no thorough analysis leading to a coherent strategy and appropriate pro-poor approaches and programmes. <o:p></o:p></font></span>
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In the case of micro and pico hydro there are no readily available products available in the country which makes prices prohibitive for communities and individual households. However there is a good potential for local manufacture of water wheels and pico turbines, although the market is still very limited and therefore local services tend to be rather expensive.<br />
  
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<font face="Arial">'''''<span lang="EN-GB" style="mso-ansi-language: en-gb">Government Five-Year Programme 2000-2004</span>'''''<b><span lang="EN-GB" style="mso-ansi-language: en-gb">: </span></b><span lang="EN-GB" style="mso-ansi-language: en-gb">Its main objectives is reducing absolute poverty through social services, rural development, and rapid and sustainable economic growth development mainly in the rural areas. Twelve of the 15 priority energy actions involve electricity. The remaining three are (i) expanding rural access (ii) diversification of energy sources to promote sustainability, including biomass and (iii) more widespread distribution of kerosene. <o:p></o:p></span></font>
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In its first phase, ENDEV MOZAMBIQUE started pioneer activities in the local manufacture of water wheels for upgrading traditional maize mills and the manufacture of pico turbines with most promising results. Therefore it is envisaged to upscale micro/pico hydro power activities sustainably on a local level with an appropriate and cost effective approach for technical capacity building, technology transfer and market development.
  
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<span lang="EN-GB" style="mso-ansi-language: en-gb"><font face="Arial">The''''' Action Plan for the Reduction of Absolute Poverty (PARPA) 2001-2005'' '''promotes the reduction of environmental impacts of non-renewable resources, reliable energy supplies for economic growth and new and renewable energy sources in the electrification of remote areas. Furthermore it stresses the importance of electrification of districts with economic potential and of private sector participation in the energy field. <o:p></o:p></font></span>
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The market for PV is divided into steadily growing local market spots and mainly capital based PV providers working with directly imported equipment for government projects funded by donors. The local market is efficient and reliable but informal, with low quality products of Chinese origin coming mainly from RSA. Market actors are lacking technical knowledge. In parallel to the dissemination of products from the local market ENDEV MOZAMBIQUE has started designing an energy efficient compact '''small solar home system (SSHS)''' with a local enterprise. In the case of PV for household lighting, technical capacity building, technology transfer and market development is envisaged within a Public Private Partnership (PPP) measure with German enterprises and higher quality products.
  
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<span lang="EN-GB" style="mso-ansi-language: en-gb"><font face="Arial">The''''' Action Plan for the Reduction of Absolute Poverty II (PARPA II) '''''establishes target number for people provided with access to electricity in the future. It also deals with the issue of intensifying CONELEC’s work. The targeted outcomes until 2009 are: <o:p></o:p></font></span>
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* [[Mozambique Solar Hub|'''Click here to read about the market situation for solar solutions in Mozambique.''']]
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* [[Mozambique Cooking Energy Hub|'''Click here to read about the market situation for improved cookstoves in Mozambique.''']]
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* [[Mozambique Productive Uses of Energy Hub|'''Click here to read about the market situation for solar irrigation in Mozambique.''']]<br />
  
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<span lang="EN-GB" style="font-family: symbol; mso-fareast-font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span lang="EN-GB" style="mso-ansi-language: en-gb"><font face="Arial">CONELEC operates efficiently <o:p></o:p></font></span>
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<u>In addition to the overarching need for developing the countries extensive energy resources (hydro, coal, gas and biomass) for both domestic and regional consumption the main challenges in the power sector in Mozambique are:</u><br />
  
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<span lang="EN-GB" style="font-family: symbol; mso-fareast-font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span lang="EN-GB" style="mso-ansi-language: en-gb"><font face="Arial">800,000 people – access rate of 12% – are provided with new and sustainable access to modern energy<o:p></o:p></font></span>
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*Ensuring that affordable electricity supply is available to meet the rapidly growing domestic demand. In the near term, this will involve the continued extension of the grid with a focus on loss reduction and intensification of the grid,
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*Reaching the vast areas of the country beyond the national grid managed by EDM. The GoM is committed to supporting decentralized electrification of social infrastructure (rural schools, clinics and administrative offices) and to increase access to modern energy services to villages and rural enterprises through PV systems, micro/pico-hydro schemes, modern biomass energy, and other Renewable Energy Technologies (RETs),
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*Ensuring that power shortages do not become a constraint on economic growth. Several GoM proposed generation and transmission ―mega-projects‖ will address sufficiency and security of supply for the medium to long-term,
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* Institutional strengthening and capacity development of the main sector public institutions (MoE, EdM, FUNAE and CNELEC) but also of the private sector composed of NGOs, MFIs, and local enterprises working with RETs, in order to improve their respective performance, governance and effectiveness.<br /><span lang="en-us"><span></span></span>
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[[Mozambique Energy Situation#toc|►Go to Top]]
  
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<span lang="EN-GB" style="font-family: symbol; mso-fareast-font-family: symbol; mso-bidi-font-family: symbol; mso-ansi-language: en-gb"><span style="mso-list: ignore">·<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span lang="EN-GB" style="mso-ansi-language: en-gb"><font face="Arial">and 500 of new institutions are provided with sustainable access to modern energy outside the grid.<o:p></o:p></font></span>
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=Key Problems of the Energy Sector=
  
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<span lang="EN-GB" style="mso-ansi-language: en-gb"><font face="Arial">Until the end of November AMES-M contributed sustainable access to modern energy for 27,323 people to the targeted number of PARPA II. <o:p></o:p></font></span>
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Power Africa states that Mozambique's energy sector's most challenging issues are as follows<ref name="Power Africa. (2018). Mozambique Factsheet. Retrieved from: https://www.usaid.gov/sites/default/files/documents/1860/Mozambique_-_November_2018_Country_Fact_Sheet.pdf">Power Africa. (2018). Mozambique Factsheet. Retrieved from: https://www.usaid.gov/sites/default/files/documents/1860/Mozambique_-_November_2018_Country_Fact_Sheet.pdf</ref>:
  
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= [[|<span lang="EN-US" style="mso-fareast-font-family: arial; mso-bidi-font-family: arial; mso-ansi-language: en-us"><span style="mso-list: ignore"><font face="Arial" size="5">3</font><span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><span lang="EN-US" style="mso-ansi-language: en-us"><font face="Arial" size="5">Activities of other stakeholders and donors</font></span>]]<span lang="EN-US" style="mso-ansi-language: en-us"><o:p></o:p></span> =
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*Public Finances/Macro-economic issues<br />
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*Lacking credible&nbsp;utility and cost-reflective tariff<br />
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*Lack of strong, transparent regulator<br />
  
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<span lang="EN-GB" style="line-height: 150%; mso-bidi-font-size: 11.0pt; mso-bidi-font-family: arial; mso-ansi-language: en-gb"><font face="Arial">The most activities are executed in the field of electrification. Danida, Norway/SIDA, World Bank and AFD have activities in generation, transmission or distribution of electricity. <o:p></o:p></font></span>
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=Policy Framework, Laws and Regulations=
  
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<span lang="EN-GB" style="line-height: 150%; mso-bidi-font-size: 11.0pt; mso-bidi-font-family: arial; mso-ansi-language: en-gb"><font face="Arial">Furthermore World Bank and AFD have some programmes in the field of transmission and distribution of electricity. All of them are active in the area of rural electrification as well. <o:p></o:p></font></span>
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The legal framework relating to energy in Mozambique is composed of a variety of policies, strategies and regulations, the most important ones being the energy strategy (2009), the policy for the development of new and renewable energies 2011-2025 (2011), the strategy of the conversation and sustainable use of biomass energy (2013), the strategy of biofuels (2009), the regulation of biofuels and their mixture and the regulation that established the feed in tariff for new and renewable energies - REFIT (2014).
  
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<span lang="EN-GB" style="line-height: 150%; mso-bidi-font-size: 11.0pt; mso-bidi-font-family: arial; mso-ansi-language: en-gb"><font face="Arial">Grid based activities are supported by the two main programmes Energy Reform and Access Project (ERAP) and Electricity Project (EP).<o:p></o:p></font></span>
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Within PARPA (PRSP), the programme for reduction and alleviation of absolute poverty, the GoM has been granting high priority to efforts to increase access to electricity for the population. Within the PARPA II the GoM has affirmed the critical role of the energy sector in reducing poverty. Adequate and equitable access to energy resources and services such as the provision of energy services to households, rural schools, administrative offices, and hospitals in rural areas is defined as a key driver of growth and poverty alleviation. The energy-related goals set in the PARPA are being operationalised by GoM through a number of strategies, investments and studies that have been prepared or are under way. The PARPA II (§507ff) outlines a programme for the energy sector, which entails: Electrification, Liquid Fuels, Renewable Energy, and Intersectoral Collaboration.<br />
  
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<span lang="EN-GB" style="line-height: 150%; mso-bidi-font-size: 11.0pt; mso-bidi-font-family: arial; mso-ansi-language: en-gb"><font face="Arial">In addition DANIDA through FUNAE, the World Bank through the ERAP program and the Spanish cooperation as well as UNIDO works with renewable energy and Solar PV at rural areas. Furthermore some donors give consultancies to important institution such as EdM, DIPREME, DNE, FUNAE and CONELEC. The Norway Cooperation and AFD support the development of the oil and gas field. ADF is financing the Pande and Temane projects by a loan. <o:p></o:p></font></span>
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<u>The Energy Policy approved March 3rd 1998 by the Council of Ministers under Resolution 5/98 established with the following objectives among others relevant for ENDEV MOZAMBIQUE.:</u>
  
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<span lang="EN-GB" style="line-height: 150%; mso-bidi-font-size: 11.0pt; mso-bidi-font-family: arial; mso-ansi-language: en-gb"><font face="Arial">Besides FUNAE and the Swedish International Development Agency who are supposed to fund hydropower plants, there are no major activities of other donors in the field of Pico and Hydro Power. Next to the Pico Hydropower project at Chua no other project has started yet. <o:p></o:p></font></span>
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*Guarantee reliable supply of energy, at lowest possible cost, in order to meet present demand and future levels based on economic development trajectories,
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*Increase the energy options available for household consumption,
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*Secure better efficiency in energy utilization,
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*Promote the development of environmentally friendly conversion technologies, namely hydro, solar, wind and biomass,
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*Promote competitive, dynamic and more efficient entrepreneurs.
  
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<span lang="EN-GB" style="line-height: 150%; mso-bidi-font-size: 11.0pt; mso-bidi-font-family: arial; mso-ansi-language: en-gb"><o:p><font face="Arial">&nbsp;</font></o:p></span>
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<u>In March 2009 the Policy for Renewables was defined with the following objectives among others with relevance for ENDEV MOZAMBIQUE:</u>
  
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<font face="Arial"><span lang="EN-GB" style="line-height: 150%; mso-bidi-font-size: 11.0pt; mso-bidi-font-family: arial; mso-ansi-language: en-gb">At the moment some changes are taking place regarding the donor intervention: DANIDA’s Energy Sector Programme Support (ESPS) in <st1:place w:st="on"><st1:country-region w:st="on">Mozambique</st1:country-region></st1:place> phased out in 2008. It comprised Support to the National Energy Sector Institutions, to the National Electricity Operator (EdM)
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*Increase the access to modern energy services of high quality and accessible prices,
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and to Decentralised Energy Management. From the current year on it will be concentrating its activities more on climate and environmental issues. </span><span lang="EN-GB" style="mso-ansi-language: en-gb">SIDA will be working with the Ministry of Energy and NORAD </span><span lang="EN-GB" style="line-height: 150%; mso-bidi-font-size: 11.0pt; mso-bidi-font-family: arial; mso-ansi-language: en-gb">with EdM. There is no donor who would take over the support of FUNAE that was provided by DANIDA before. However, FUNAE receives funding from several sources as the European Union, the World Bank, the Spanish Cooperation and others.<o:p></o:p></span></font>
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*Reduce poverty and contribute to the Millennium Development Goals,
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* Contribute to the generation of local and national income and employment.
  
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<span class="MsoPageNumber"><span lang="EN-US" style="font-family: 'arial','sans-serif'; mso-bidi-font-family: 'times new roman'; mso-ansi-language: en-us"><o:p>&nbsp;</o:p></span></span>
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The revised Energy Strategy aims to align Mozambique with best international practices for efficient energy utilization, raising awareness amongst its citizens about good environmental practices, diversifying the energy supply matrix, giving particular emphasis to new and renewable sources of energy and to the opportunities contained within the Clean Development Mechanisms, under the Kyoto Protocol. It should ensure energy availability to sustainably meet the requirements of national socio-economic development by undertaking the necessary actions to increase access to diversified energy sources in a sustainable way, contributing to the welfare of the population and the country‘s socio-economic development. The strategy recognizes accelerating electrification efforts, giving priority to rural areas, through the expansion and intensification of the national grid, the utilization of Renewables, the optimization of low cost solutions, and the introduction of measures which will ensure productive and efficient use of electricity (as low consumption/high efficiency light bulbs). The GoM aims to support regional integration and reflects in its national legal framework the best practices in environmental protection. Mozambique has its own Oil Law and Electricity Law. A Regulation defines the licensing of electricity installations, another Regulation establishes the competencies and procedures regarding concessioning of production, transmission, distribution and marketing of electricity, as well as its importation and exportation. Other regulations establish the norms for the national grid, the instructions for CNELEC and its regulatory functions, and the Technical Unit for Implementation of Hydroelectric Projects (UTIP). Based on the new Energy Sector Strategy with its specific subsectors of Electrical Energy and New and Renewable Energies, as well as the Energy Strategic Plan 2009 – 2013, the GoM has prepared a comprehensive 5-year plan for energy development and access. In the current government’s 5-year plan (2015-2019) increased access to electricity appears as one of the strategic objectives. Mozambique’s target is to provide electricity access to 50% of the population by 2023. Rural electrification is planned to be increased using both the national grid and household solar systems. A special focus lies on the electrification of health centres through PV solutions. Also the construction of 12 mini hydropower plants is foreseen.&nbsp;The 5-year plan does not make any mention of biomass related energy issues.<br />
  
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== 1.2 Problem Situation  ==
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* [[Policy Framework and Energy Access Strategies in Mozambique|'''For more information, see this article.''']]<br />
  
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Access to electricity is among the lowest in the world, especially in rural areas where only 1% of the population is supplied. The national grid only reaches a small part of the country. Many district capitals depend on expensive and often unreliable power generation with diesel generators. Outside these towns, the situation is even worse. The overwhelming majority of rural households, most rural schools, health centres and administrative posts are without access to electricity. Lack of mechanical power is a bottleneck for the rural subsistence agricultural production. Rural areas lack electricity for lighting, radio and communication in households and for refrigeration in small commerce. Lack of access to electricity restricts the local population’s opportunities for income-generating activities. Though diesel based mini grids are already established and being initiated in rural areas. On the one hand the use of diesel is not sustainable (environmental hazards, limited availability and reliability of supply, volatility of prices), on the other hand these kinds of schemes are based on private and community involvement and are initiated mostly without any involvement of public support and are not dependent on subsidies or external donor aid. This phenomenon provides a massive potential for sustainable and large scale rural electrification.
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[[Mozambique Energy Situation#toc|►Go to Top]]
  
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Bio-energy, especially the use of pure vegetable plant oil in adapted diesel generators, provides support in overcoming this situation. However, the GoM as well as the private sector has only little experience in the sustainable production of biomass and production of energy out of biomass.
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=Institutional Set-up in the Energy Sector=
  
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[[Category:Mosambique]]
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<u>The public sector is represented by:</u>
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[[Category: Country Situation]]
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*The [http://www.mireme.gov.mz/ Ministry of Mineral Resources and Energy (MIREME) FUNAE] was created in 2015 after elections by merging the former Ministry of Energy with the Ministry of Mineral Resources. The Ministry consists of four directorates: Mines and Geology, Hydrocarbons and Fuels, Energy and Planning and Cooperation. In the energy sector MIREME is responsible for national energy planning and policy formulation and for overseeing the operation and development of the energy sector. MIREME is represented in the provinces through the Provincial Directorates of Mineral Resources and Energy (DIPREME).<br />
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*Electricidade de Moçambique (EdM), is a vertically-integrated, government-owned electric utility responsible for generation, transmission and distribution of electricity in the national grid. EdM buys most of its power supply (apr. 400 MW) from Hidroelectrica de Cahora Bassa (HCB), owner and operator of the Cahora Bassa hydro power plant on the Zambezi (2,075 MW). The GoM owns 82 percent of HCB which operates as an Independent Power Producer (IPP) The bulk of the electricity generated at HCB is exported to South Africa, with a small amount to Zimbabwe. EdM sells any excess electricity on the Southern Africa Short Term Energy Market. The Mozambique transmission grid is currently interconnected with South Africa, Zimbabwe and Swaziland.
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*The [http://www.funae.co.mz/index.php?option=com_content&view=article&id=46&Itemid=27&lang=en Fundo Nacional de Energia] (FUNAE) was established in 1997 as a public institution to promote rural electrification and rural access to modern energy services, in a sustainable manner, and as a contributor to economic and social development in the country. Since its establishment FUNAE has implemented numerous projects using renewable energy technologies to electrify schools, clinics and communities.<br />
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*The Conselho Nacional de Electricidade (CNELEC) was re-established as an independent advisory regulatory body for the electricity sector in early 2008 with support from the World Bank Energy Reform and Access Project (ERAP). CNELEC was instructed to give its highest priority to an evaluation of EDM‘s performance under its Performance Contract with the GoM. This Performance Contract covers the years 2007 to 2009 and sets out the goals and indicators to be met annually by EDM and GoM. CNELEC was also instructed to conduct a review of the current methodology used by EDM in setting tariffs. In performing the review of EDM‘s performance, the directive instructed CNELEC to conduct its review in an open and transparent manner with public hearings in several locations throughout the country.
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*The private sector is represented by various licensed private enterprises which participate in the grid extension and household connection works of EdM and private enterprises for the provision and installation of PV products, often situated exclusively in the capital Maputo. A microfinance sector with banks and NGOs is active throughout the country but often exclusively restricted to the province and/or district capitals. The NGO sector is characterized by relatively weak institutional profiles and technical specialisation, as well as weak implementation structures and technical competences.
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[[Institutional Framework in Mozambique|'''For more information, see this article.''']]
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[[Mozambique Energy Situation#toc|►Go to Top]]
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=Major Donor Activities=
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Currently, different international actors such as the EnDev, SNV, GIZ, World Bank, JICA, USAID are active in the energy supporting different policies as well as RE projects<ref>Affrica-EU Renewable Energy Cooperation Program: Solar Energy Investment Opportunities in MozambiquefckLRfckLR</ref>.&nbsp;
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* [[Energy Access Programmes in Mozambique|'''For a list of all donor energy programmes, click here.''']]
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* [[Development Actors in Mozambique|'''For a list of all development actors, click here.''']]
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'''Past Programmes'''
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Since July 2007, the World Bank has served as co-chair with the GoM on the ―Energy Sector Working Group‖ that was established within the framework of the Paris Declaration. The Bank is in preparation of the second phase of the '''Energy Reform and Access Project (ERAP)''', which will now be called '''Energy Development and Access Programme (EDAP).''' The proposed project will help establish the necessary operational framework for increasing electricity access to un-electrified areas nationally in a sustainable and programmatic manner, aiming at mainstreaming a sector-wide approach (SWAp) by establishing a comprehensive donor partnership framework for coordinated and sustained financing of investment and capacity strengthening aligned with national priorities and procedures (WB, ADB, ADF, OFID, BADEA, IsDB, Kuweit Fund) With Norway, the World Bank is also co-financing the Mozambique- Malawi Transmission Interconnection Project (cancelled medio 2010) and the Mozambique Regional Transmission Backbone Project. Sweden is engaged together with co-financing of Norway and Denmark in rural electrification (grid extension and household connections) in Sofala, Manica, Tete and Niassa Provinces. Norway is financing rural electrification in Cabo Delgado and grid extension in Gurue - Cuamba – Lichinga and Namacurra – Pebane. '''Technical assistance (TA)''' and capacity development for EdM in mega project development for power generation, as well as for the MoE are delivered by Norway and Sweden. Sweden also is embarking on the rehabilitation of the hydro power stations in Mavuzi and Chicamba. The '''European Commission (EC)''' is financing rural electrification in Cabo Delgado, Tete and Sofala with EdM, PV electrification in rural areas with FUNAE and capacity building in energy planning and management for the MoE. DFID is giving TA on Biofuels to the National Directorate of Renewable Energy of the MoE.
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In April 2019,&nbsp;World Bank approved a USD 82 million energy grant to Mozambique to increase access to electricity in the peri-urban and rural areas, expand the existing grid network and promote the use of off-grid energy solutions in areas where grid expansion is not feasible.This project is also supported by a USD 55 million Multi-Donor Trust Fund, also admisitered by the World bank. The project will focus on the northern provinces of Niassa, Nampula and Cabo Delgado, and Zambezia and Sofala in the centre of the country. It also aims to contribute towards the Mozambique government’s Energy for All project.
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Belgium had an energy program with the Ministry of Energy trough FUNAE, from September 2010 up to December 2016. The program focused on off-grid energy systems, based on renewable energy resources (hydraulic, solar and wind), in remote rural areas where no grid connection is foreseen within the next five years. The program was financed, on grant basis, electrification systems for community infrastructures such as administrative buildings, schools, health centres, water pumping devices and public lighting. In 2017 a new program has to start, worth a grant of 12 million euro, with the same partner FUNAE, including renewable energy installations for private use (household, shops or small enterprises) to be stimulated by subsidies (investment funds) and soft loans through micro-finance systems. In order to increase the sustainability of the renewable energy installations, the program will also provide a computerized asset management system and technical assistance focused on capacity building through training initiatives, research and development.&nbsp;
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[[Mozambique Energy Situation#toc|►Go to Top]]
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=Further Information=
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*[[Mozambique Off-grid Knowledge Hub]]
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*[[Mozambique Solar Hub]]
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*[[Mozambique Nano/Mini Grid Hub]]
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*[[Mozambique Cooking Energy Hub]]
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*[[Mozambique Productive Uses of Energy Hub]]
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*USAID Power Africa: [https://www.usaid.gov/sites/default/files/documents/1860/Mozambique_-_November_2018_Country_Fact_Sheet.pdf Mozambique Factsheet]
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=References=
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<references />
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[[Mozambique Energy Situation#toc|►Go to Top]]

Latest revision as of 08:17, 21 July 2022

Mozambique
Flag of Mozambique.png
Location _______.png

Capital:

Maputo

Region:

Sub-Saharan Africa

Coordinates:

25.9500° S, 32.5833° E

Total Area (km²): It includes a country's total area, including areas under inland bodies of water and some coastal waterways.

799,380

Population: It is based on the de facto definition of population, which counts all residents regardless of legal status or citizenship--except for refugees not permanently settled in the country of asylum, who are generally considered part of the population of their country of origin.

32,969,518 (2022)

Rural Population (% of total population): It refers to people living in rural areas as defined by national statistical offices. It is calculated as the difference between total population and urban population.

62 (2022)

GDP (current US$): It is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.

18,406,835,955 (2022)

GDP Per Capita (current US$): It is gross domestic product divided by midyear population

558.30 (2022)

Access to Electricity (% of population): It is the percentage of population with access to electricity.

31.49 (2021)

Energy Imports Net (% of energy use): It is estimated as energy use less production, both measured in oil equivalents. A negative value indicates that the country is a net exporter. Energy use refers to use of primary energy before transformation to other end-use fuels, which is equal to indigenous production plus imports and stock changes, minus exports and fuels supplied to ships and aircraft engaged in international transport.

-54.60 (2014)

Fossil Fuel Energy Consumption (% of total): It comprises coal, oil, petroleum, and natural gas products.

12.62 (2014)

Source: World Bank




Introduction

The Republic of Mozambique is located on the south-eastern coast of Africa and has a surface area of 801,590 square kilometres. It is bordered by South Africa, Swaziland, Zimbabwe, Zambia, Malawi, Tanzania, and separated by the Indian Ocean from Madagascar. The country is divided into ten provinces, and a provincial capital city (see Map: Provinces in Mozambique). It is one of the poorest countries in the world, and the 7th poorest in Africa with a GDP per capita of USD 1281 (2019), a total GDP of USD 14.96 billion (2019), and an annual GDP growth of 3.11% (2018).
Mozambique has undertaken significant efforts in recent years to electrify the country. The electrification rate has increased from 5% in 2001 to 29% in 2019[1]. In 2022, it increased to 44%[2] from 34% in 2020.[3] Access to electricity, however, remains low and is mainly focused on urban areas. In 2019, 72% of the urban population had access to electricity compared to 5% of the rural population. [4]This imbalance represents an important challenge to achieving country-wide electrification by 2030, considering that the vast majority (63% in 2019) of Mozambique’s population lives in rural areas.[5]

The national grid including off grid facilities is claimed to reach some 30 % of the country today in terms of numbers of people with potential access to the grid (not connected). Many district capitals depend on expensive and often unreliable power generation with diesel generators. Outside these towns, the situation is even worse. The overwhelming majority of rural households, most rural schools, health centres and administrative posts are without access to electricity. Lack of mechanical power is a bottleneck for the rural subsistence agricultural production, as grain producers have to walk long distances to the nearest milling facility. Rural areas lack electricity for lighting, radio and communication in households and for refrigeration in small commerce. Nevertheless, many rural household spend a considerable share of their income for modern energy in the form of kerosene or batteries (€ 4–5 per month). Lack of access to electricity restricts the local population’s opportunities for income-generating activities.
The energy sector is key to the country's economy already today, since energy exports make up a large share of total foreign exchange earnings. Moreover, the availability of cheap electricity is one of the main reasons for the significant foreign direct investment in energy-intensive industries in Mozambique. Energy exports (hydropower, coal, gas and possibly oil) and projects to cover the growing domestic electricity demand will play an increasingly important role in the years to come. The liberalisation of the power sector initiated in 1997 allowed for third parties from the private sector to enter the power generation, transmission and distribution markets without impressive results so far (2012).
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Potentials

Mozambique has considerable energy resources with an estimated hydropower potential of 12,000 MW and also gas reserves (estimated at reaching 700 billion cubic metres) and vast coal reserves (estimated to reach 140 million TJ) with the potential of generating approx. 500 MW and 5,000 MW respectively. Regarding solar, it has about 23 TW capacity, out of which 2.7 GW could easily be harnessed[6].

A National Policy and Strategy for Biofuels was approved in February 2009 which focuses on ethanol from sugarcane and sorghum and coconut and jatropha for biodiesel. This policy has led to hundreds of millions of dollars in investment plans in ethanol and biodiesel in Mozambique. In October 2007 ethanol plant in Mozambique received US$510 million in support from the UK. However, the actual on-the-ground activity is unclear and production has yet to commence. Biofuels are not readily available in the country and export details are also not available[7].

Click here to read more about the RE potential in Mozambique.

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Renewable Energy Potential

Resource Availability Total Potential
Wind Along the coasts (Speeds between 4 - 6 m/s at 80m height)
 4.5 GW[8]
Solar 4.5-7 kWh/m2/day 2.7 GW[9]
Hydro 12 GW (1 GW in small installations up to 10 MW) 12 000 MW
Biomass 100's of MW (Big biogas potential) 2 GW biomass potential[10]

Click here to read more about the RE potential in Mozambique.

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Electricity Generation and Consumption

Mozambique has a total installed capacity of 2,780 MW (2020). The projections for 2030 from the Power Sector Master Plan show an expected increase in the total installed capacity to 6,001 MW. Hydropower is the dominating electricity source with 2,189 MW, 79% of the total energy mix, followed by 442 MW from gas (16%), 108 MW from heavy fuel oil (HFO) (4%) and 41 MW from solar (1%) (2020).[11]

There are six working hydropower stations across the country. The largest hydroelectric plant is located in the Tete province and is operated by Hidroeléctrica de Cahora Bassa (HCB).[12] HCB is responsible for most of the hydroelectric generation, with a capacity of 2,075 MW. In 2014, it supplied up to 88% of the power consumed in Mozambique.[13] Due to the low electricity demand (peak demand in 2014 was estimated at only 831 MW) resulting from scarce energy access in Mozambique, the majority of the generation from HCB is exported to South Africa. Smaller shares are exported to Zimbabwe and Botswana. [5]

The table below shows the most recent energy indicators reported by the IEA. In 2018, the total primary energy supply was 10.43 Mtoe, from a total of 20.23 Mtoe produced that year. Final electricity consumption was only 13.63 TWh, however, this number has increased drastically by more than 2000% since 1990.[14]

Table: Mozambique’s key energy indicators
Energy production 20.23 Mtoe
Total primary energy supply 10.43 Mtoe
Total electricity consumption 13.63 TWh
Electricity consumption per capita 0.5 MWh

For more information about generation and consumption of electricity in Mozambique, please click here.

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Noteworthy Trends

Despite its large renewable energy resources, the country energy sector focus is on large hydro projects in the Zambezi Basin (i.e. Mphanda Nkuwa) to produce power for export to South Africa and for industry. Mozambique relies heavily on the export of commercial electricity to South Africa from the Cahora Bassa dam on the Zambezi River to generate foreign exchange income.

The two immediate projects are the 850 MW (nominal) expansion of the Cahora Bassa dam and the controversial Mphanda Nkuwa dam (2500 MW). See table below.

Project Name Type of Project

Size

Comments

CB North Bank Hydropower expansion

850 to 1300 additional MW

Detailed feasibility study is underway

Mphanda Nkuwa Hydropower

2500 MW

Env. + Soc. Impact Study underway

Massingir Hydropower

40 MW

EDM managed

Lurio Hydropower

120 MW


Majawa Hydropower

25 MW


Malema Hydropower

60 MW


Moatize Coal fired power plant

1500 MW

IES is the developer

Temane Combined Cycle natural gas fired power plant

300-400 MW

On May 2022, USAID and DFC signed an agreement with EDM to provide a loan of USD 200 m to support the design, construction and operation of the project. [15]


As a result of March 2009 Government policy, the biofuels sector is receiving hundreds of millions of dollars in investment (sugar – ethanol, jatropha --- biodiesel). However, production has yet to commence and there is considerable controversy about transparency and food vs. energy.

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Market Situation

The market situation for photovoltaic (PV) and hydro power technologies and services is still in early stages.The off-grid market is identified to be around 4 million households, creating an opportunity for not only electrification but also boosting the local economy. UNEP has estimated that for every 10,000 off-grid houses connection, 30 jobs are created by renewable energy. The jobs could be created in the local manufacturing, distribution and maintenance. Apart from electrification, off-grid can also support other productive uses of electricity especially in the agriculture sector (solar pumping)[16].

The private sector is underdeveloped in Mozambique and until 2018, only 25 business were either active or were inclined to enter the market in near future. These businesses are mostly dependent on public tender and donor initiatives. However, the informal off-grid solar products market is thriving in Mozambique with products imported from South Africa, Tanzania or China. This could be because Mozambique has a higher import duty and VAT on PV and ICS as compared to other sub-Saharan countries such as Ethiopia, Ghana or Tanzania. These products in the informal market enter via informal channels and do not pay the import taxes[17].

The Improved Cookstove (ICS) market in Mozambique is small and is categorized by mostly donor/NGOs initiatives. Up until March 2020, there were 10-15 companies supplying ICS stoves (charcoal and fuelwood) in the Mozambique market compared to 4 ICS suppliers in 2018. Some of the companies include: MozCarbon, ENI,  ICEMA LDA, Sogepal and Pamoja Moçambique. For the ICS supply chain, two-step distribution chain i.e. producers to consumers is most common but many companies are also expanding the distribution chain to reach consumers outside the capital city, Maputo.[18]

For green mini grid, the tendering process is similar as big energy projects and this increases the complexity for obtaining a concession contact, especially for local businesses. However, the government is promoting mini-grids for public spaces such as health centres, schools and water pumping for community and agricultural purposes[6]. There is also a new regulation which has provisions for green mini-grids but it is still unclear how they will be implemented on the ground. [19]

In the case of micro and pico hydro there are no readily available products available in the country which makes prices prohibitive for communities and individual households. However there is a good potential for local manufacture of water wheels and pico turbines, although the market is still very limited and therefore local services tend to be rather expensive.

In its first phase, ENDEV MOZAMBIQUE started pioneer activities in the local manufacture of water wheels for upgrading traditional maize mills and the manufacture of pico turbines with most promising results. Therefore it is envisaged to upscale micro/pico hydro power activities sustainably on a local level with an appropriate and cost effective approach for technical capacity building, technology transfer and market development.

The market for PV is divided into steadily growing local market spots and mainly capital based PV providers working with directly imported equipment for government projects funded by donors. The local market is efficient and reliable but informal, with low quality products of Chinese origin coming mainly from RSA. Market actors are lacking technical knowledge. In parallel to the dissemination of products from the local market ENDEV MOZAMBIQUE has started designing an energy efficient compact small solar home system (SSHS) with a local enterprise. In the case of PV for household lighting, technical capacity building, technology transfer and market development is envisaged within a Public Private Partnership (PPP) measure with German enterprises and higher quality products.

In addition to the overarching need for developing the countries extensive energy resources (hydro, coal, gas and biomass) for both domestic and regional consumption the main challenges in the power sector in Mozambique are:

  • Ensuring that affordable electricity supply is available to meet the rapidly growing domestic demand. In the near term, this will involve the continued extension of the grid with a focus on loss reduction and intensification of the grid,
  • Reaching the vast areas of the country beyond the national grid managed by EDM. The GoM is committed to supporting decentralized electrification of social infrastructure (rural schools, clinics and administrative offices) and to increase access to modern energy services to villages and rural enterprises through PV systems, micro/pico-hydro schemes, modern biomass energy, and other Renewable Energy Technologies (RETs),
  • Ensuring that power shortages do not become a constraint on economic growth. Several GoM proposed generation and transmission ―mega-projects‖ will address sufficiency and security of supply for the medium to long-term,
  • Institutional strengthening and capacity development of the main sector public institutions (MoE, EdM, FUNAE and CNELEC) but also of the private sector composed of NGOs, MFIs, and local enterprises working with RETs, in order to improve their respective performance, governance and effectiveness.

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Key Problems of the Energy Sector

Power Africa states that Mozambique's energy sector's most challenging issues are as follows[20]:

  • Public Finances/Macro-economic issues
  • Lacking credible utility and cost-reflective tariff
  • Lack of strong, transparent regulator

Policy Framework, Laws and Regulations

The legal framework relating to energy in Mozambique is composed of a variety of policies, strategies and regulations, the most important ones being the energy strategy (2009), the policy for the development of new and renewable energies 2011-2025 (2011), the strategy of the conversation and sustainable use of biomass energy (2013), the strategy of biofuels (2009), the regulation of biofuels and their mixture and the regulation that established the feed in tariff for new and renewable energies - REFIT (2014).

Within PARPA (PRSP), the programme for reduction and alleviation of absolute poverty, the GoM has been granting high priority to efforts to increase access to electricity for the population. Within the PARPA II the GoM has affirmed the critical role of the energy sector in reducing poverty. Adequate and equitable access to energy resources and services such as the provision of energy services to households, rural schools, administrative offices, and hospitals in rural areas is defined as a key driver of growth and poverty alleviation. The energy-related goals set in the PARPA are being operationalised by GoM through a number of strategies, investments and studies that have been prepared or are under way. The PARPA II (§507ff) outlines a programme for the energy sector, which entails: Electrification, Liquid Fuels, Renewable Energy, and Intersectoral Collaboration.

The Energy Policy approved March 3rd 1998 by the Council of Ministers under Resolution 5/98 established with the following objectives among others relevant for ENDEV MOZAMBIQUE.:

  • Guarantee reliable supply of energy, at lowest possible cost, in order to meet present demand and future levels based on economic development trajectories,
  • Increase the energy options available for household consumption,
  • Secure better efficiency in energy utilization,
  • Promote the development of environmentally friendly conversion technologies, namely hydro, solar, wind and biomass,
  • Promote competitive, dynamic and more efficient entrepreneurs.

In March 2009 the Policy for Renewables was defined with the following objectives among others with relevance for ENDEV MOZAMBIQUE:

  • Increase the access to modern energy services of high quality and accessible prices,
  • Reduce poverty and contribute to the Millennium Development Goals,
  • Contribute to the generation of local and national income and employment.

The revised Energy Strategy aims to align Mozambique with best international practices for efficient energy utilization, raising awareness amongst its citizens about good environmental practices, diversifying the energy supply matrix, giving particular emphasis to new and renewable sources of energy and to the opportunities contained within the Clean Development Mechanisms, under the Kyoto Protocol. It should ensure energy availability to sustainably meet the requirements of national socio-economic development by undertaking the necessary actions to increase access to diversified energy sources in a sustainable way, contributing to the welfare of the population and the country‘s socio-economic development. The strategy recognizes accelerating electrification efforts, giving priority to rural areas, through the expansion and intensification of the national grid, the utilization of Renewables, the optimization of low cost solutions, and the introduction of measures which will ensure productive and efficient use of electricity (as low consumption/high efficiency light bulbs). The GoM aims to support regional integration and reflects in its national legal framework the best practices in environmental protection. Mozambique has its own Oil Law and Electricity Law. A Regulation defines the licensing of electricity installations, another Regulation establishes the competencies and procedures regarding concessioning of production, transmission, distribution and marketing of electricity, as well as its importation and exportation. Other regulations establish the norms for the national grid, the instructions for CNELEC and its regulatory functions, and the Technical Unit for Implementation of Hydroelectric Projects (UTIP). Based on the new Energy Sector Strategy with its specific subsectors of Electrical Energy and New and Renewable Energies, as well as the Energy Strategic Plan 2009 – 2013, the GoM has prepared a comprehensive 5-year plan for energy development and access. In the current government’s 5-year plan (2015-2019) increased access to electricity appears as one of the strategic objectives. Mozambique’s target is to provide electricity access to 50% of the population by 2023. Rural electrification is planned to be increased using both the national grid and household solar systems. A special focus lies on the electrification of health centres through PV solutions. Also the construction of 12 mini hydropower plants is foreseen. The 5-year plan does not make any mention of biomass related energy issues.

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Institutional Set-up in the Energy Sector

The public sector is represented by:

  • The Ministry of Mineral Resources and Energy (MIREME) FUNAE was created in 2015 after elections by merging the former Ministry of Energy with the Ministry of Mineral Resources. The Ministry consists of four directorates: Mines and Geology, Hydrocarbons and Fuels, Energy and Planning and Cooperation. In the energy sector MIREME is responsible for national energy planning and policy formulation and for overseeing the operation and development of the energy sector. MIREME is represented in the provinces through the Provincial Directorates of Mineral Resources and Energy (DIPREME).
  • Electricidade de Moçambique (EdM), is a vertically-integrated, government-owned electric utility responsible for generation, transmission and distribution of electricity in the national grid. EdM buys most of its power supply (apr. 400 MW) from Hidroelectrica de Cahora Bassa (HCB), owner and operator of the Cahora Bassa hydro power plant on the Zambezi (2,075 MW). The GoM owns 82 percent of HCB which operates as an Independent Power Producer (IPP) The bulk of the electricity generated at HCB is exported to South Africa, with a small amount to Zimbabwe. EdM sells any excess electricity on the Southern Africa Short Term Energy Market. The Mozambique transmission grid is currently interconnected with South Africa, Zimbabwe and Swaziland.
  • The Fundo Nacional de Energia (FUNAE) was established in 1997 as a public institution to promote rural electrification and rural access to modern energy services, in a sustainable manner, and as a contributor to economic and social development in the country. Since its establishment FUNAE has implemented numerous projects using renewable energy technologies to electrify schools, clinics and communities.
  • The Conselho Nacional de Electricidade (CNELEC) was re-established as an independent advisory regulatory body for the electricity sector in early 2008 with support from the World Bank Energy Reform and Access Project (ERAP). CNELEC was instructed to give its highest priority to an evaluation of EDM‘s performance under its Performance Contract with the GoM. This Performance Contract covers the years 2007 to 2009 and sets out the goals and indicators to be met annually by EDM and GoM. CNELEC was also instructed to conduct a review of the current methodology used by EDM in setting tariffs. In performing the review of EDM‘s performance, the directive instructed CNELEC to conduct its review in an open and transparent manner with public hearings in several locations throughout the country.
  • The private sector is represented by various licensed private enterprises which participate in the grid extension and household connection works of EdM and private enterprises for the provision and installation of PV products, often situated exclusively in the capital Maputo. A microfinance sector with banks and NGOs is active throughout the country but often exclusively restricted to the province and/or district capitals. The NGO sector is characterized by relatively weak institutional profiles and technical specialisation, as well as weak implementation structures and technical competences.

For more information, see this article.

►Go to Top

Major Donor Activities

Currently, different international actors such as the EnDev, SNV, GIZ, World Bank, JICA, USAID are active in the energy supporting different policies as well as RE projects[21]. 

Past Programmes

Since July 2007, the World Bank has served as co-chair with the GoM on the ―Energy Sector Working Group‖ that was established within the framework of the Paris Declaration. The Bank is in preparation of the second phase of the Energy Reform and Access Project (ERAP), which will now be called Energy Development and Access Programme (EDAP). The proposed project will help establish the necessary operational framework for increasing electricity access to un-electrified areas nationally in a sustainable and programmatic manner, aiming at mainstreaming a sector-wide approach (SWAp) by establishing a comprehensive donor partnership framework for coordinated and sustained financing of investment and capacity strengthening aligned with national priorities and procedures (WB, ADB, ADF, OFID, BADEA, IsDB, Kuweit Fund) With Norway, the World Bank is also co-financing the Mozambique- Malawi Transmission Interconnection Project (cancelled medio 2010) and the Mozambique Regional Transmission Backbone Project. Sweden is engaged together with co-financing of Norway and Denmark in rural electrification (grid extension and household connections) in Sofala, Manica, Tete and Niassa Provinces. Norway is financing rural electrification in Cabo Delgado and grid extension in Gurue - Cuamba – Lichinga and Namacurra – Pebane. Technical assistance (TA) and capacity development for EdM in mega project development for power generation, as well as for the MoE are delivered by Norway and Sweden. Sweden also is embarking on the rehabilitation of the hydro power stations in Mavuzi and Chicamba. The European Commission (EC) is financing rural electrification in Cabo Delgado, Tete and Sofala with EdM, PV electrification in rural areas with FUNAE and capacity building in energy planning and management for the MoE. DFID is giving TA on Biofuels to the National Directorate of Renewable Energy of the MoE.

In April 2019, World Bank approved a USD 82 million energy grant to Mozambique to increase access to electricity in the peri-urban and rural areas, expand the existing grid network and promote the use of off-grid energy solutions in areas where grid expansion is not feasible.This project is also supported by a USD 55 million Multi-Donor Trust Fund, also admisitered by the World bank. The project will focus on the northern provinces of Niassa, Nampula and Cabo Delgado, and Zambezia and Sofala in the centre of the country. It also aims to contribute towards the Mozambique government’s Energy for All project.

Belgium had an energy program with the Ministry of Energy trough FUNAE, from September 2010 up to December 2016. The program focused on off-grid energy systems, based on renewable energy resources (hydraulic, solar and wind), in remote rural areas where no grid connection is foreseen within the next five years. The program was financed, on grant basis, electrification systems for community infrastructures such as administrative buildings, schools, health centres, water pumping devices and public lighting. In 2017 a new program has to start, worth a grant of 12 million euro, with the same partner FUNAE, including renewable energy installations for private use (household, shops or small enterprises) to be stimulated by subsidies (investment funds) and soft loans through micro-finance systems. In order to increase the sustainability of the renewable energy installations, the program will also provide a computerized asset management system and technical assistance focused on capacity building through training initiatives, research and development. 

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Further Information

References

  1. ↑ World Bank, ‘Mozambique | Data’. https://data.worldbank.org/indicator/EG.ELC.ACCS.UR.ZS?locations=MZ
  2. ↑ S.Excia Eng. Carlos Zacarias - Ministro dos Recursos Minerais e Energia (MIREME). 2022. CDD Just Energy Transition. https://www.youtube.com/watch?v=3GphYhRJq50
  3. ↑ Renewables in Mozambique (2021):https://www.lerenovaveis.org/contents/lerpublication/aler_mar2021_resumo-renovaveis-em-mocambique-2021.pdf
  4. ↑ World Bank, ‘Mozambique | Data’. https://data.worldbank.org/indicator/EG.ELC.ACCS.UR.ZS?locations=MZ
  5. ↑ 5.0 5.1 Mozambique: Energy and the Poor’, K. Naidoo, C. Loots, 2020, https://sun-connect-news.org/fileadmin/DATEIEN/Dateien/New/2021-01-29_UNDP-UNCDF-Mozambique-Energy-and-the-Poor.pdf.
  6. ↑ 6.0 6.1 BERF (2016). Business environment constraints in Mozambique’s Renewable Energy Sector: Solar PV Systems and Improved Cook Stoves, Business Environment Reform Facility, UK Department of International Development. https://assets.publishing.service.gov.uk/media/5c76b459ed915d3547d50a07/Final_BERF-Mozambique-Renewable-Energy-8th-Dec2016.pdf
  7. ↑ The biofuels sector, and especially the biodiesel sector, has attracted considerable investment. Hundreds of millions of dollars of investment has been made. Much of this has been in the sugar sector which is growing rapidly. At least 7 biodiesel/jatropha plantations have been set up with poor -- and controversial – results. (see Justica Ambiental!/Uniao Nacional de Camponeses, Jatropha: A Socio-economic pitfall for Mozambique. August 2009. http://ictsd.org/i/news/biores/45169/
  8. ↑ Recurso Eólico’, accessed 24 June 2021, https://www.funae.co.mz/index.php/pt/recursos/recurso-eolico
  9. ↑ Pranab Baruah and Brendan Coleman, ‘Country Brief: Mozambique Off-Grid Solar Power in Mozambique: Opportunities for Universal Energy Access and Barriers to Private Sector Participation’, n.d., 26.
  10. ↑ GET.invest, ‘Renewable Energy Potential – GET.Invest’, accessed 21 April 2021, https://www.get-invest.eu/market-information/mozambique/renewable-energy-potential/
  11. ↑ Aler_mar2021_resumo-Renovaveis-Em-Mocambique-2021.Pdf’, accessed 23 April 2021, https://www.lerenovaveis.org/contents/lerpublication/aler_mar2021_resumo-renovaveis-em-mocambique-2021.pdf
  12. ↑ Mozambique: Energy and the Poor’, K. Naidoo, C. Loots, 2020, https://sun-connect-news.org/fileadmin/DATEIEN/Dateien/New/2021-01-29_UNDP-UNCDF-Mozambique-Energy-and-the-Poor.pdf.
  13. ↑ EDM, Integrated Master Plan 2018-2043,https://www.edm.co.mz/en/document/reports/integrated-master-plan-2018-2043
  14. ↑ IEA, ‘Mozambique - Countries & Regions’ https://www.iea.org/countries/mozambique
  15. ↑ US backs Mozambique’s energy security projects: https://www.esi-africa.com/us-backs-mozambiques-energy-security-projects/
  16. ↑ Global Green Growth Institute (2017). Country Brief: Mozambique. Off-grid solar power in Mozambique: Opportunities for universal energy access and barriers to private sector participation.fckLRfckLRhttps://sun-connect-news.org/fileadmin/DATEIEN/Dateien/New/Country-Brief-Mozambique.pdf
  17. ↑ Lighting Global (2018):Off-Grid Solar Market Assessment in MozambiquefckLRfckLR https://www.lightingafrica.org/wp-content/uploads/2019/07/Mozambique_off-grid-assessment.pdf
  18. ↑ EnDev, ‘Workshop Energy Market Scorecard Mozambique ICS 2020’
  19. ↑ 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
  20. ↑ Power Africa. (2018). Mozambique Factsheet. Retrieved from: https://www.usaid.gov/sites/default/files/documents/1860/Mozambique_-_November_2018_Country_Fact_Sheet.pdf
  21. ↑ Affrica-EU Renewable Energy Cooperation Program: Solar Energy Investment Opportunities in MozambiquefckLRfckLR

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