Mozambique is advancing efforts to secure financing for the $4.5bn Mphanda Nkuwa hydropower project, with support from the African Development Bank (AfDB), as part of plans to strengthen national power infrastructure and expand regional electricity exports.
Progress follows a technical workshop held on 5 February 2026 at the AfDB’s country office in Maputo. Participants included representatives from the Ministry of Finance, the Ministry of Mineral Resources and Energy, Electricidade de Moçambique (EDM), the Mphanda Nkuwa Implementation Office (GMNK), and AfDB officials.
Discussions focused on operationalising a credit enhancement facility intended to reduce project risk and attract private investment. The mechanism is expected to support financing arrangements and help lower long-term electricity costs.
AfDB has advised the government during project development, contributing to the establishment of a procurement framework that resulted in the selection of a strategic investor consortium. The project is now entering discussions on its security structure, with a Partial Risk Guarantee (PRG) considered central to improving bankability.
The Mozambican government has requested a PRG facility to support liquidity obligations of EDM and mitigate off-taker risk for lenders. AfDB also plans to mobilise concessional and grant financing for the regional transmission line that will evacuate power from the project to domestic industrial centres and enable exports to neighbouring countries.
“This workshop marks the shift from advisory to execution,” said Rômulo Corrêa, Country Manager, African Development Bank. “Having worked with the Government to structure the transaction, we are now intending to de-risk Mphanda Nkuwa by utilising AfDB support. Under our ADF-17 mandate to ‘Unlock Capital at Scale,’ we intend to secure the financing framework that will position Mozambique as the energy powerhouse of Southern Africa.”
The planned 1500MW Mphanda Nkuwa run-of-river hydropower plant is expected to support national electrification, supply industrial demand, and provide baseload capacity for export through the Southern African Power Pool, generating foreign currency revenues.
The project is being developed by a consortium led by EDF and TotalEnergies in partnership with EDM and Hidroeléctrica de Cahora Bassa (HCB), combining international investment with state participation.
