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PowerGrid Corporation
Finance and Policy  
2 October 2017

Moz to receive $150m grant from World Bank to bolster power system

The World Bank has approved an International Development Association (IDA) $150 million grant to bolster Mozambique’s energy sector.

This grant will help Mozambique’s electricity utility company EDM improve the operational capacity of its electricity network as well as its operational efficiencies, the Bank said in a statement.

World Bank: improving power system

According to the Bank, the country has increased power supply from 6% in 2006 to the current 26% with all administrative centres country-wide have energy access.

Despite the significant improvements, the Bank highlighted that EDM’s total system losses were estimated at 26% in 2016, higher than the weighted average for Sub-Saharan Africa.

In addition, the country is challenged with poor network infrastructure; lack of a countrywide and interconnected transmission systems, among others.

“I am pleased with the approval of this grant, especially in these times of much need public investment in this crucial sector,” said Mark Lundell, World Bank Country Director for Mozambique, Madagascar, Mauritius, Seychelles, and Comoros.

“This IDA grant is aligned with our strategy, Country Partnership Framework, and the Government’s own Five Year Plan, which targets expanded infrastructure to enhancing the productive sectors of the economy and achieve economic diversification,” Lundell added.

Earmarking financial support

The World Bank noted: “The bulk of this financial support ($117.0 million equivalent) will assist the rehabilitation and upgrading of network infrastructure to improve security and reliability of electricity supply through the reinforcement of transmission and distribution lines, installation of additional transformers to increase capacity, and reactive compensation equipment in the cities of Maputo, Matola, Nacala, Pemba, and Lichinga.” Read more...

The Bank added that the balance of funds will be put toward EDM’s operational and commercial operations ($29.5 million equivalent); the company’s capacity building and implementation support ($1.5 million equivalent); as well as capacity building support for the Ministry of Mineral Resources and Energy ($2.0 million equivalent).

“Mozambique Power Efficiency and Reliability Improvement Project is part of a comprehensive World Bank programme of support to the power sector in Mozambique, and represents a coordinated and complementary effort from other development partners supporting the development of the sector,” said Zayra Romo, World Bank Senior Energy Specialist and Task Team Leader of this operation.

The project builds on the lessons learned from the recently implemented World Bank-supported Transmission Upgrade Project; and the Energy Development and Access Project, among other past investments.

 

Featured image: Stock

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