#gas#investment#Mozambique

Funding and technicalities agreed for Mozambique gas plant

$2 billion project hailed as regional 'game changer'

Dominic Ellis
|Dec 10|magazine6 min read

Debt funding and technical solutions have been secured for the Central Termica de Temane (CTT) project in Mozambique, which aims to become operational in Q4 2021.

CTT will be a 450MW gas-fired power plant supplying low cost, reliable power to EDM through a 25-year tolling agreement. Gas supply will come from the PSA concession at the Pande-Temane Inhassoro fields operated by Sasol Petroleum Mozambique Limitada. Globeleq is the lead developer along with its partners EDM, Sasol Africa Limited and eleQtra. 

CTT will receive funding of up to US$200 million from the US International Development Finance Corporation (DFC) and up to US$50 million from the OPEC Fund for International Development (OPEC Fund) once execution of the loan agreements and other closing conditions have been finalised. The International Finance Corporation is expected to provide the balance of the required debt financing and is in the process of finalizing its approvals. Together with the gas supply and related value chain investment, the entire project will see an investment in excess of US$2 billion. 

Spanish contractor TSK has been selected to design and construct the power plant, which will use efficient and proven Siemens gas turbines. TSK has extensive experience in designing similar-sized combined-cycle power plants utilising Siemens turbines.

Around 40 per cent of Mozambique people have access to electricity through the grid or mini systems, according to the IEA. Countries with electrification rates of less than 80 percent consistently suffer from reduced GDP per capita, reports McKinsey.

"Mozambique faces one of the lowest electrification rates in the world," said Edward Burrier, DFC Executive Vice President for Strategy. "This project will reduce the cost of electricity, increase power generation, and address a critical development challenge for the people of Mozambique. We are proud of our partnership and look forward to this important project moving forward." 

Abdulhamid Alkhalifa, Director-General of the OPEC Fund, said it marks the third project it has co-financed in Africa where Globeleq is the sponsor. "Our private sector loan facility complements a public-sector term loan we recently extended to Mozambique's government to finance 563 km of associated transmission infrastructure. Once completed, the Temane initiative will increase the supply of efficient and affordable energy to households, businesses and industries contributing to social and economic development in Mozambique and the region."

Mike Scholey, CEO of Globeleq, said: "The Temane initiative is an absolute regional game-changer. It will ensure a reliable and affordable power supply - crucial elements for economic and social development.  CTT will provide electricity access to millions of people in the region."

CTT will anchor the development of the 563km high-voltage transmission line and associated transmission infrastructure (the Temane Transmission Project or TTP). An aerial view of the capital Maputo is pictured.

Press release
Energy Digital magazine