HomeIndustry SectorsFuture EnergyGL Africa Energy historic $400m LNG power plant deal signed

GL Africa Energy historic $400m LNG power plant deal signed

GL Africa Energy has entered a $400+ million concessions agreement with the Government of Mozambique for a 250MW LNG power plant.

GL Africa Energy has finalised a concession agreement with the Government of Mozambique to finance and operate a 250MW LNG power plant in Nacala District, Nampula Province in northern Mozambique. The agreement was signed yesterday in Maputo by Minister of Mineral Resources and Energy, Ernesto Max Elias Tonela and Michael Kearns, Director of GL Africa Energy.

The deal signals the start of a three-part phased investment totalling $400 million. An initial $90 million will create 50MW capacity within 16 months. The second and third phases will add 200MW in total and will be completed within 24 months.

GL Energy Moçambique, the special purpose vehicle and a subsidiary of GL Africa Energy, will build and operate the plant upon its completion. The project will be funded by 70% debt and 30% equity. The terms of the project and concession agreement received requisite approval by the Mozambican Cabinet on 7 October, 2021 before being officially signed on 5 November.

It heralds one of the largest energy infrastructure projects within Mozambique in the last decade and is GL Africa Energy’s largest investment in a power plant to date, adding to its existing operations in eight countries across the Great Lakes and Southern Africa regions. The deal is structured as a 30-year Public-Private-Partnership (PPP).

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The Concession is granted in line with the Public Private Partnership (PPP) Act and is as a result of the Domestic Gas International Tender won by GLAE, with gas supply determined as per the Government implementation strategy. This project is a key pillar of the Mozambique Government’s Gas Monetisation Strategy and by utilising gas from the Rovuma LNG project, will be instrumental in further reducing the cost of energy.

The plant will transform the energy landscape for the entire region. Excess supply from the new Nacala facility will be exported to other markets through the South African Power Pool (SAPP).

Domestically, the plant will bring electricity to over half a million people. The company also hopes this investment will support the country’s plan to turn the region into a viable trading hub. Over 300 workers will be employed during construction.

GL Africa Energy‘s LNG solution provides an almost instant bridge fuel throughout the next two decades, reducing reliance on more polluting HFO, diesel and coal. LNG is set to play a crucial role in the transition towards renewables for the country and the region, enabling a higher penetration of renewables into the energy mix in the long
term. This strategy is part of GL Africa Energy’s ambition to generate 1,000MW across the continent by 2025.

Mamadou Goumble, CEO Energy Business, JCG: “We are delighted to take another step towards completing the Nacala gas fired plant. It is a historic
milestone for the region. Power and development go hand-in-hand, and we are so proud to play our part in supporting the communities of Nacala and the entire region of southern Africa. This plant will ensure reliable power for tens of thousands of businesses and homes. It will change the lives and fortunes for Mozambicans and beyond.

“We’re thankful to our partners in the Government of Mozambique for backing our vision. It demonstrates the power of public and private collaboration. It is just the beginning of our long-term commitment to the country.”