Sasol and Globeleq have reached financial close on the gas-fired Central Termica de Temane (CTT) power project in Mozambique.
The International Finance Corp. (IFC), FMO and Emerging Africa Infrastructure Fund (EAIF) are providing $253.5 million. The US International Development Finance Corp. (DFC) and OPEC Fund provided $191.5mn and $50mn respectively.
The World Bank’s Multilateral Investment Guarantee Agency (MIGA) provided up to $251.3mn in political risk insurance.
CTT will be build at Temane, in Inhambane Province. The $652.3mn project consists of a 450 MW power plant, which will sell electricity to Electricidade de Moçambique (EDM) under a 25-year deal.
The power plant should cover around 14% of Mozambique’s needs. It will use Siemens SGT-800 turbines, the statement said, which can be upgraded to take high hydrogen content.
Spain’s TSK will build the power plant with the goal of starting in 2024. Construction will create 830 jobs, with 90 permanent jobs once the plant is operating.
CTT will export power via a new 563 km high-voltage transmission line, the Temane Transmission Project (TTP). EDM owns the TTP. The World Bank, Africa Development Bank (AfDB), Islamic Development Bank, OPEC Fund and Norway will fund the power line project.
The whole package represents an investment of more than $2 billion.
Transition plans
IFC regional director Linda Munyengeterwa said the project “has the potential to deliver significant economic and social benefits”. It will help meet growing local demand for power, while also supporting the energy transition, she said.
“This is our third power investment in Mozambique, and we remain committed to supporting the sustainable development of the country’s electricity sector,” Munyengeterwa noted.
Minister of Mineral Resources and Energy Max Tonela said Mozambique was at risk from climate change. “We are working on our long-term decarbonisation plans in line with [the Paris] Agreement and CTT is fully in line with our transition which also includes developing hydro, solar and wind projects.”
Sasol vice president Priscillah Mabelane said the CTT project would “create jobs, enable sustainable and lower carbon energy supply and long-lasting in-country benefits. Sasol is committed to a meaningful contribution towards the development Mozambique.”
Globeleq CEO Mike Scholey said the company was supporting Mozambique’s aim of achieving universal energy access by 2030.
The company is also working on a solar and battery project in Mozambique, at Cuamba. TSK is also building this 19 MW solar plan. The EAIF provided $19mn in debt funding for Cuamba.
The US’ DFC approved financing for the Mozambique project in September 2020. In addition to CTT, it also agreed to provide up to $1.5bn in political risk insurance for LNG developments in Mozambique’s north.