The project financial closure was reached in March 2018. In his intervention at the launch, Chargé d’Affaires at the Norwegian Embassy Tom Eriksen, emphasized the fact that this is the very first plant of its size to be connected to the main grid in Mozambique. It was also noted that this is a clear indication that despite all the challenges Mozambique is facing, it is still possible for international players to invest and conduct businesses in Mozambique.
The Minister of Mineral resources and Energy, Max Tonela, pointed out that this represents an important step in realizing Mozambique's ambition to increase renewable power generation in its energy mix.
The 40 MW plant is located close to the city of Mocuba in the Zambézia Province, and is expected to deliver 79,000 MWh per year of much needed electricity to the northern regions of Mozambique. The plant will deliver power to the national grid and produce enough energy to serve about 175,000 households.
The project costs are estimated at US$ 76 million, funded through equity of US$ 14 million, a grant of US$ 7million and project debt of US$ 55 million. Equity partners are Scatec Solar (52.5%), KLP Norfund Investments (22.5%) and EDM (25%). Scatec Solar will deliver Engineering, Procurement and Construction (EPC) services, as well as Operation and Maintenance (O&M) and Asset Management services to the power plant, with debt financing is provided by IFC, the International Finance Corporation, a member of the World Bank Group, and the Emerging Africa Infrastructure Fund.
IFC provided project debt of US$ 19 million on its own account together with a concessional loan from the Climate Investment Fund of the same size and a syndicated loan of US$ 17 million from the Emerging Africa Infrastructure Fund (EAIF), managed by Investec Asset Management, which is part of the Private Infrastructure Development Group (PIDG). In addition, EAIF is directly providing a US$7 million Viability Gap Funding grant for the project raised from the Technical Assistance Fund of the PIDG.