AfDB to advise on 1500MW Mphanda Nkuwa hydropower project

25 May 2022

The African Development Bank (AfDB) is to provide advisory services for the development of the $4.5 billion 1500MW Mphanda Nkuwa hydropower project in Mozambique.

AfDB signed an agreement earlier this week with implementing agency Gabinete de Implementação do Projecto Hidroeléctrico de Mphanda Nkuwa, which is part of the Mozambique government’s Ministry of Natural Resources and Energy.  

The project entails development of a hydropower plant to  be located on the Zambezi River in the Marara District of the country’s Tete Province. The plant will be 60km downstream from Cahora Bassa dam and 70km upstream from Tete city. A transmission system comprising 1300km of 550kV high voltage DC transmission line between Cataxia and Maputo will also be constructed. The Mphanda Nkuwa project is expected to reach financial close by end-2024; commissioning is anticipated in 2031.

“The partnership with African Development Bank further strengthens the capacity of our implementing agency to develop the Mphanda Nkuwa project,” commented Carlos Yum, Director of Gabinete de Implementação do Projecto Hidroeléctrico de Mphanda Nkuwa. “The African Development Bank will ensure that world class environmental, social and governance and associated standards are adhered to during the development, and that the project is attractive to reputable developers, financiers and investors to ensure competitive and least-cost power for Mozambique and the region.”  

Continued expansion of Mozambique’s generation capacity is required to meet growing domestic demand and drive economic and social development. In addition, the southern Africa region offers market opportunities that Mozambique is well placed to meet as a supplier of competitively produced energy. Mphanda Nkuwa is projected  to have one of the lowest electricity production costs in the region.

 “The project reinforces our efforts to combat climate change in a region that is desperately short of power but equally in need of transformation and a just energy transition. It is also a great privilege to lead the Bank’s team that will be executing this advisory mandate. We are honoured to be chosen by Mozambique to partner on this important project,” said Dr. Kevin Kariuki, African Development Bank Vice President for Power, Energy Climate and Green Growth.

The project builds on earlier success in attracting  private investment into the country, including several independent power producers (IPPs). These include the 175MW Central Térmica de Ressano Garcia, the 120MW Central Térmica de Gigawatt, the 40MW Mocuba solar plant, the  40MW Metoro solar plant and, most recently, the 450MW Temane Power Project.

Mphanda Nkuwa project is included in Mozambique’s National Energy Sector Master Plan 2018–2043 as a national priority, as well as a priority investment for the Southern Africa Power Pool Plan. The project enhances private sector competitiveness through infrastructure development and regional energy trading. It is also aligned with the Bank’s 10-Year Strategy, as well as the “Light Up and Power Africa High-5 strategic priority.

Earlier this week, the International Finance Corporation (IFC) also announced it is to collaborate on the project.

Carlos Yum, Director of the Mphanda Nkuwa hydropower project Implementing agency (left), Mozambican president Filipe Nyusi, African Development Bank President Akinwumi Adesina and African Development Bank Vice President Kevin Kariuki following the signing of an advisory services agreement between the government and the African Development Bank for the $4.5bn Mphanda Nkuwa hydropower project

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