Mozambique

Mozambique is AFD Group's first country of operation in Southern Africa (1981). This historic presence was made possible thanks to a wide range of financial tools mobilized over the years. Today, AFD is supporting the country in its low-carbon trajectory and in the development of basic services.

Context

Bordered by the Indian Ocean in southern Africa, Mozambique is a vast country with over 28 million inhabitants. Since the end of the civil war in 1992, it has experienced one of the highest rates of economic growth on the continent.

The country has many assets, which are still under-exploited: hydro-electric power, off shore oil, mining, agriculture and tourism. Indeed, Mozambique has an exceptionally rich natural heritage and several protected nature reserves. Moreover, the recent discovery of significant coal and gas deposits could radically change Mozambique's economic position and structure by 2025.

However, the country’s economic growth - linked in part to support from the international community - has not led to a genuine reduction in poverty. Mozambique still faces significant challenges: improving the distribution of wealth, making basic services (water and electricity) accessible to the whole population and upgrading its infrastructures.

AFD has been present since 1981 and is supporting the country's sustainable development through loans to the public (State or public companies) and private sectors (banks, companies, micro-finance institutions), financial guarantees, subsidies (NGOs, studies, capacity building), technical support missions and training.

AFD's Mozambique office is directly attached to the Southern Africa regional office in Johannesburg.

Our approach

"AFD and Mozambique: reducing poverty and protecting the environment"

Our energy portfolio (implemented in partnership with the Ministry of Energy, EDM- Electricidade de Mocambique, ARENE the regulator and HCB- Hidroeléctrica de Cahora Bassa ) focuses on:

The development of renewable energies:

Financing of the construction of the Metoro solar power plant (Cabo Delgado), with a capacity of 41MW ($40 million co-financed with Proparco);
Deployment of the PROLER pilot programme (€30 million EU funds) which supports the implementation of open and transparent tenders for the development, construction and operation of four solar and wind power plants (160MW on-grid) in partnership with the private sector;
Rehabilitation of the Cahora Bassa dam operated by HCB (€98 million, of which €23M EU).

Modernization of the electricity network and strengthening of its manager, EDM :

Reduction of non-technical losses on EDM's southern network, carried out in partnership with the EU (€10 million)
Financing of a twinning technical cooperation between EDM-EDF (Electricité de France) to improve the operational and restoration capacities of the electricity network in the southern zone of the country.
Modernization of EDM's training system (€6 million).

AFD is also committed to improve the population's access to drinking water and sanitation services. The partnership with FIPAG (€6 million) will soon connect 830 000 people to Maputo's water network. In addition, AFD is supporting the public company AIAS to rehabilitate the Beira wastewater treatment plant and part of the city's sewage network (€20 million, EU funds).

With a surface area of 800,000 km², Mozambique is home to a great diversity of ecosystems, more than a quarter of which is protected by law. Today, the disappearance of natural habitats, overexploitation of animal and plant species, pollution and climate change are the main threats to the country’s rich biodiversity.

For over 20 years, AFD and FFEM (French Facility for Global Environment), alongside with ANAC and various operators in the sector, have been supporting projects that combine biodiversity protection with local development actions for populations in rural areas where poverty is particularly acute. In total, eight projects are being implemented (around €20M) in the Limpopo, Niassa, Chimanimani, Gile and Marromeu protected areas. More recently, AFD has been involved in natural disaster risk reduction, promoting nature-based solutions in the Zambezi Delta.

AFD is also supporting the Mozambican authorities with public policy dialogue on innovative financing for conservation, climate change resilient territorial modelling and sectoral commitments to foster the country climate transition.

Since 2020, AFD has formed part of the FASE multi-donor pooled fund (€16 million) for the implementation of the Mozambican government's ten-year sectoral plan for basic education. The project to formulate a secondary school teacher training strategy (€2 million) is fully complementary to the FASE approach.

AFD is financing the NGO MUVA to promote female economic empowerment in disadvantaged urban areas of Mozambique (€3 million). AFD also collaborates with the Mozambican Foundation Futebol da Força, which promotes the sexual and reproductive health rights of young Mozambican women through football.