Build a 40 MW solar plant, the first large-scale solar in country

Executive Summary

The Mocuba Solar plant in Mozambique is one of the world’s first climate mitigation projects to be strategically designed as part of a country’s adaptation strategy. The Project consists of the development, financing, construction, operation and maintenance of a 40.5 MW solar PV in Mocuba, Centre-Northern Mozambique. The plant is helping to diversify and decentralize Mozambique’s energy system and improve climate resilience in a country extremely vulnerable to climate change. Mocuba Solar opens a new chapter in Mozambique’s pursuit of low-carbon growth, helping to secure reliable and efficient energy for over 173,000 households in a remote and low-income area in north-central Mozambique.
Most of Mozambique’s current power capacity comes from the Cahora Bassa Hydropower plant located in a drought-affected river basin. Mozambique’s power system depends on a highly fragmented transmission system vulnerable to interruptions like long-term shutdowns of transmission lines when faced with severe flooding. The country’s power system suffers when precipitation levels are high (transmission service disruptions) and when they are low (reduced energy supply) — investment in resilience measures is desperately needed. The Mocuba plant is in Zambézia, a province that receives power from Cahora Bassa Hydro via a single long-distance transmission line, with few local generation facilities as alternatives. This leaves over 5 million people at risk of energy shortages.
The project is structured as an SPV, Central Solar de Mocuba (CESOM), an independent producer contracted to sell power under a 25-year Power Purchase Agreement (PPA) to EDM, the state-owned utility. Scatec Solar is the majority investor in CESOM (52.5%), with EDM (25%) and Norfund (22.5%) owning minority shares. The IFC, the CIF, Emerging Africa Infrastructure Fund and the Private Infrastructure Development Group provided debt and grants for the project. Due to Mozambique’s deteriorating credit rating and severe restrictions on use of USD due to its debt crisis, DFI support was critical to achieving financial close. The DFIs’ risk assessment process also helped the project manage risks, among them high financial and commercial risk and high ESG risk due to land replacement required as part of implementing the project.
Mocuba Solar commenced operations in August 2019, establishing a track record for solar PV in Mozambique and improving energy security and resilience for a remote population. The project’s strategic location will reduce energy transmission losses and improve the security of energy supply in northern Mozambique and stabilize the grid. It is estimated that the power plant’s connection to the EDM grid will result in a seven percent improvement in the network default level.