Intelligent news from Mozambique

Mozambique convenes finance meeting for 400 MW Sasol power plant

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Mozambique’s energy minister will convene a meeting this Thursday and Friday between the country’s energy authorities and international finance institutions to decide the way forward for a proposed 400 MW gas-fired power plant in Inhambane province.

The meeting will discuss the proposals for the power plant to be built at Temane as a 49:51 joint venture between Sasol and EDM, the national electricity utility. The plant will be fed gas from Sasol’s PSA project, which the company started drilling last year.  

As well as EDM and Sasol, this week’s meeting will be attended by the World Bank and the African Development Bank (AfDB), the Norwegian Embassy in Mozambique, German state development bank KfW, French development agency AFD and Japanese development fund JICA. It will also feature “strategic partners” Cahora Bassa Hydroelectric, which is currently Mozambique’s biggest generation company; national oil company ENH; and petroleum regulator INP.

The meeting will put together an action plan for the structure the project up to financial close, an EDM statement on Wednesday said. The participants will evaluate possible ways of financing the project, and consider areas of risk and possible mitigation strategies.

As well as the power plant itself, the project includes a high tension transmission line to link the plant to the southern electricity grid in Mozambique, which is currently mainly supplied by two gas-fired power plants at Ressano Garcia on the South African border, and by power from Cahora Bassa which is repurchased from South African utility Eskom at a significant loss to Mozambique.

If built, the new line from Temane could form part of the planned ‘backbone’ transmission project to link Cahora Bassa in Tete with the south of the country – which would be an important step in making further generation mega-projects viable in Tete, including the proposed Mphanda Nkua hydro plant.

Filipe Nyusi, the President of Mozambique, visited the Ministry of Energy on 15 February and heard Minister Letícia Klemens list a number of projects that she wants to get off the ground by the end of 2019 – including Mphanda Nkua, but not Temane.

She mentioned gas-fired projects including a planned 100 MW plant at Maputo, and a 40 MW plant at Kuvaninga – both of which will use gas from Sasol’s fields in Temane.

According to EDM’s statement on Wednesday, the 400 MW Temane plant will play a “determining role in security of supply of electricity in the country, and the consolidation of its export to the region.”

© 2017, Zitamar Ltd. Reproduction and dissemination prohibited without written permission.

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2 Comments

  1. Dear Sirs,

    I have one question regarding this article “Mozambique convenes meeting for 400MW Sasol power plant”
    On the third paragraph from the bottom to top it says “Filipe Nyusi, the President of Mozambique visited the Ministry of Energy on 15 February….-Including Mphanda Nkua, but not Temane”.
    This means Temane is not a priority for the Minister? Or this is just a writing mistake.
    It’s quite difficult to understand how the government organizes a workshop with financing institutions in order to look for funds for a project that is NOT A PRIORITY.
    We’d appreciate if you could please clarify us.
    Thank you

    • mm

      Temane was not listed as a priority project by the Minister on 15 February – at least according to a report by state news agency AIM that day. However, the report did list Gigawatt as one of the priority projects, which is in fact already in operation. It is possible AIM reported Gigawatt instead of Temane, in error – or perhaps Minister Klemens said Gigawatt instead of Temane, in error.

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