Europe helps Mozambique design

auction mechanism for renewables

A €4 million fund will be used to support an initiative launched by the French
Development Agency and the country’s power utility Eletricidade de Moçambique, E.P.
(EDM).

October 13, 2017 Emiliano Bellini

Flickr: Leandro Neumann Cluffo

The European Union will provide the government of Mozambique with €4 million in
funds to support the initiative Projeto de Promoção de Leilões para Energias
Renováveis (PROLER), which is aimed at creating a regulatory framework and an
auction mechanism for the development of large-scale solar and renewable energy
projects.

In a press release published by several Portuguese media outlets, the local government
said that the initiative is being implemented by the French Development and
Mozambique’s state-owned power provider Eletricidade de Moçambique, E.P. (EDM),
and that the EU funds will be allocated through the Africa Infrastructure Trust Fund.

More details on when and how the new auction scheme may be implemented were not
revealed.

With this new cash injection, the African country can move forwards with its renewable
energy plans, which received another strong push in late September, when the World
Bank announced it had approved a $150 million loan for EDM. The funds, the company
said, will be used to reinforce its grid as well as to increase the capabilities of its
transmission and distribution network. This improvement of the grid is expected to
increase the reliability of power supply, the government said, but it may also be the
required step to open the country’s grid to a larger integration of solar and renewable
energy power plants.

In Mozambique, there is currently also a large-scale solar project under development by

Norwegian solar developer Scatec, Norway’s development finance agency Norfund, and
power utility Electricidade de Moçambique (EdM). Power generated by the installation
will be sold to EdM under a 25-year PPA. The plant will be constructed close to the city
of Mocuba, Zambezia province, and represents the country‘s first step towards solar
deployment.

The government of Mozambique, on the other hand, is also supporting off-grid solar in
rural areas. In mid-September, Mozambique’s Fundo de Energia (FUNAE), a public
institution under the Ministry of Mineral Resources and Energy, said it will provide
$500 million for an electrification program based on hydro and solar energy, as well as
PV microgrids.