The international independent solar power producer, Scatec Solar has declared that in partnership with Norfund, they have secured the sale of solar power over a 25 year period to the state owned utility EDM.
The signing ceremony of the Power Purchase Agreement (PPA) took place in Maputo on Monday in the presence of the Norwegian minister of foreign affairs, Børge Brende, the Mozambican minister of mineral resources and energy, Letícia Klemens as well as Dr Mateus Magala, chairman and CEO of EDM.
According to the PV producer, the project is the first large-scale solar plant to be built in the country and represents an important first step in realising Mozambique’s ambition to increase renewable power generation in its energy mix.
The 40MW plant will be located close to the city of Mocuba in the Zambézia Province, and is expected to deliver 77,000MWh per year of electricity to the northern regions of the country.
Solar power plant to drive energy access
The solar plant will deliver power to the national grid and produce enough energy to serve about 175,000 households, the company stated.
During the signing ceremony, a shareholder agreement was also signed between KLP Norfund Investments AS, Scatec Solar and EDM.
The PV producer has a 52.5% share, KLP Norfund Investments (22.5%) and EDM (25%) will provide equity, while the International Finance Corporation, a member of the World Bank Group, and the Emerging Africa Infrastructure Fund intend to provide project finance debt.
The required project investment is estimated at $80 million. The parties are targeting financial close and solar plant construction is targeted to start in Q1 2017.
Renewable energy for economic growth
Commenting on the development was Scatec Solar’s CEO, Raymond Carlsen: “This is an excellent example of how private public partnerships can deliver renewable energy and support further economic growth in Mozambique.
“EDM and the government of Mozambique have demonstrated strong leadership in taking this project forward and it paves the way for further investments in renewable energy in the country.”
Norfund CEO, Kjell Roland also commented: “Access to reliable energy is a prerequisite for development. Only 3% of the world’s electricity is generated in Africa, although 15% of the world’s population lives here.”
Roland added: “Clean energy is a focus investment area for Norfund, and we appreciate being a partner in this first independent solar power producer project in Mozambique together with EDM and Scatec Solar.”