Mozambique energy sector gets major boost from International Development Finance Corporation

Image Courtesy: UNEP

MOZAMBIQUE – America’s International Development Finance Corporation (DFC) has approved a loan of up to $200 million to Central Térmica de Temane (Temane Power Plant) and agreed to provide up to $1.5 billion in political risk insurance to support the commercialisation of natural gas reserves in Area 4 of Mozambique’s Rovuma Basin.

The  two deals represent a substantial investment by the United States that will improve access to energy, lay the foundation for transformational growth in Mozambique fuelled by the natural gas sector and deliver on the U.S. Prosper Africa pledge announced last year in Maputo to increase U.S. investment in Africa.

DFC’s loan of up to $200 million to Central Térmica de Temane (CTT) will finance the development, construction, and operation of a 420-megawatt power plant and 25-kilometre interconnection line which will diversify the country’s energy supply and reduce the cost of electricity.

Only 33% of Mozambique’s population has access to electricity and this project will help Mozambique advance toward its goal of achieving universal access to energy by 2030.

DFC’s provision of $1.5 billion in political risk insurance will support the development, construction, and operation of an onshore natural gas liquefaction plant along with supporting facilities.

The energy project will provide a significant boost to Mozambique’s GDP as the country emerges as a top global gas exporter.

DFC says that, combined with forward-looking partnerships between the government and the private sector, the project has the potential to grow the economy to meet the needs of the Mozambican people.

On his part,  US ambassador to Mozambique Dennis Hearne said that these projects will have a significant development impact in Mozambique, improve lives, and create a once-in-a-generation opportunity for the country to build a more prosperous future for all Mozambicans.

DFC partners with the private sector to finance solutions to the most critical challenges facing the developing world today.

It was established by the 2019 passage of the BUILD Act (Better Utilisation of Investments Leading to Development), which strengthened and modernised American development finance.

The BUILD Act combined the capabilities of the Overseas Private Investment Corporation (OPIC) and the Development Credit Authority, which had previously been part of the U.S. Agency for International Development (USAID).

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