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The World Bank Group has approved $420 million in grants to strengthen Mozambique’s energy transmission system.

The grants will be issued through private sector investments to modernise the country’s energy transmission capacity for domestic and regional markets.

The grants will also help expand the country’s energy generation capacity.

Furthermore, the project is to be co-funded by a $24 million grant from a Norwegian Trust Fund.

Mozambique will use the grants to finance its Temane Regional Electricity Project (TREP), which includes the construction of a 563km high-voltage line between Maputo and Vilanculos/Temane.

A 400MW combined cycle gas-to-power generation plant at Temane will also be constructed.

The project will enable private investment of around $750 million for generation.

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“In addition to enhancing the transmission and generation capacities, the TREP will finance technical studies in support of regional power integration and renewable technologies in power system planning and operation. It will also support studies on power sector investment plans, including Mozambique’s role in regional trading”, indicates Zayra Romo, the project's senior energy specialist and task team leader.

“It is also fundamental to developing the Mozambican domestic power system, expanding energy access, and ensuring the secure, affordable, and sustainable power supply that is one of the key drivers of Mozambique’s economic and social development”, said Mark R. Lundell, the World Bank Country Director for Mozambique.

“The Temane project is key to increasing opportunities for power trade among SAPP countries. Despite the abundance of energy resources in the subregion, lack of cross-border interconnections remains a major constraint. The full integration of SAPP countries’ power systems and more power trade could bring savings of $42 billion in investment and operating costs till 2040. The Bank is committed to helping southern Africa realize these potential savings”, said Deborah Wetzel, the World Bank Director for Regional Integration for Africa, the Middle East and Northern Africa.