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PROLER: Supporting Mozambique to develop large-scale renewable energy production
Project
This project is carried out with the support of the European Union
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Project start date
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Status
Ongoing
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Project end date
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Project duration
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10 years
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AFD financing amount
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37 700 000 €
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Country and region
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Location
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Dondo, Manje, Lichinga, Inhambane
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Type of financing
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Partners
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European Union
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Beneficiaries
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Republic of Mozambique
This project is carried out with the support of the European Union
The content of this project information sheet falls under the sole responsibility of the AFD and does not necessarily reflect the opinions of the European Union.
AFD and the European Union work together with the public utility Electricidade de Moçambique (EDM) on the PROLER (Promotion of Renewable Energy Auctions) Program. Co-financed by AFD and the EU, this program is dedicated to diversify the energy supply in Mozambique and create a fair and attractive framework for private investment in the renewable energy sector.
Context
Access to the power grid has tripled in Mozambique over the last 10 years, from 8% in 2006 to 31% in 2019. Electricity demand will continue to grow at an annual rate of 7-8% driven by socio-economic growth. The government's goal to achieve universal access by 2030 can only be achieved by expanding its production capacity, increasing the national grid efficiency and attracting the private sector to support the substantial investments needed towards green infrastructures.
Description
The PROLER programs assists the Mozambican energy sector – EDM, ARENE, MIREME – in setting up international call for tenders. The principle of PROLER is to conduct the full development of renewable energy projects, de-risking the technical, environmental & social aspects of each project, thereby creating attractive conditions for competitive private investment.
The objective is to develop 4 renewable energy projects with a total installed capacity of around 160MW: 3 solar (Dondo, Manje, Chimbunila) and 1 wind (Jangamo). In order to mitigate offtake risks, AFD also proposes a Public Payment Guarantee for the pilot project, Dondo. AFD has committed two delegated grants from the EU of € 30.7 million in total in order to support EDM in this program, through long-term technical assistance and investment subsidies - to finance EDM equity participation in the projects and EDM investments in grid interconnection infrastructures.
Impacts
The PROLER program aims to develop clean energy sources in Mozambique and to reduce even more the carbon footprint of the generation mix. As such, the construction of the first three photovoltaic power plants are expected to reduce emissions by 25,000 tons of CO2/year and provide power for the annual consumption of 300,000 households. The program also aims to contribute to the country's socio-economic development by increasing power supply at highly competitive prices. This will have a significant impact on people and businesses which could benefit from clean and affordable energy, and eventually make the Mozambican economy all the more competitive.
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