Mozambique Advances Mphanda Nkuwa Hydropower Project with AfDB Support
Mozambique, in partnership with the African Development Bank (AfDB), is moving a step closer to securing financing for the $4.5 billion Mphanda Nkuwa Hydropower Project, a major initiative set to strengthen the country’s energy infrastructure and regional power exports.
The progress follows a high-level technical workshop held at AfDB’s Country Office in Maputo on 5 February, which brought together officials from the Ministry of Finance, the Ministry of Mineral Resources and Energy, Electricidade de Mozambique (EDM), the Mphanda Nkuwa Implementation Office (GMNK), and AfDB representatives.
The workshop focused on operationalising a Credit Enhancement facility aimed at de-risking the project and attracting private capital, ultimately reducing the cost of energy in Mozambique.
AfDB has played a strategic advisory role throughout the project, supporting a transparent framework that facilitated the selection of a reputable strategic investor consortium. The project is now set to enter discussions on its security structure, with a Partial Risk Guarantee (PRG) considered a key element for its bankability.
The Mozambican government has requested a PRG facility to backstop EDM’s liquidity obligations, mitigating off-taker risk for international lenders. AfDB also plans to mobilise concessional and grant funding to support the regional transmission line that will deliver power from Mphanda Nkuwa to industrial centres and enable exports to neighbouring countries.
“This workshop marks the shift from advisory to execution,” said Rômulo Corrêa, AfDB Country Manager for Mozambique. “Having worked with the Government to structure the transaction, we are now intending to de-risk Mphanda Nkuwa by utilising AfDB support. Under our ADF-17 mandate to ‘Unlock Capital at Scale,’ we aim to secure the financing framework that will position Mozambique as the energy powerhouse of Southern Africa.”
Once operational, the 1,500 MW run-of-river Mphanda Nkuwa Hydropower Project will provide universal energy access across Mozambique, supply competitive power to industries, and serve as a baseload exporter to the Southern African Power Pool (SAPP), generating hard currency revenues for the country.
The project is being developed by a strategic consortium comprising EDF (France) and TotalEnergies (France), alongside public sector partners EDM and Hidroeléctrica de Cahora Bassa (HCB), reflecting a collaboration between international investors and Mozambican authorities.
