IFC supports Mozambique’s solar park

IFC, a member of the World Bank Group has announced a landmark financing package of US$55 million to build Mozambique’s first utility scale solar PV plant, which will help increase electricity sector climate resilience and deliver power to rural areas. It includes US$19 million from IFC’s own account, US$19 million from Climate Investment Funds, and a syndicated loan of up to US$17 million. 

IFC’s financing will support the development of a 40.5 MW solar photovoltaic plant in Mocuba, Mozambique, being developed by Norway-based independent power producer Scatec Solar, Norway’s development finance agency Norfund, and Mozambique’s electricity utility Electricidade de Moçambique (EdM).

Funds are being mobilized from Emerging Africa Infrastructure Fund, which provides debt products to private sector infrastructure projects in Sub-Saharan Africa. The project will also receive a US$7 million Viability Gap Funding grant from the Technical Assistance Fund of the Private Infrastructure Development Group, a multi-donor funded institution that encourages private investment in infrastructure in emerging markets. 

The power generated from the plant will be sold to EdM, the state-owned public electric utility, as part of a 25-year power purchase agreement. 

Raymond Carlsen, CEO, Scatec Solar ASA, said:

“Scatec Solar is committed to harnessing Mozambique’s solar potential and infusing grid stability. This is especially important for a country that relies on a long distance power transmission system that is vulnerable to interruptions. We will leverage IFC’s knowledge and support to ensure greater resilience for the country’s electricity sector.”

Mateus Magala, Chairman of EdM, commented:

“The signing of the Mocuba financing is a great achievement for EdM and Mozambique's electricity sector. EdM wishes to thank Scatec Solar, Norfund, PIDG and IFC for their excellent cooperation and the hard work in getting the project to this important milestone.”

Norfund’s CEO Kjell Roland, stated:

“Access to reliable energy is a prerequisite for development and this solar power plant will be an important first step in increasing Mozambique’s renewable power generation. We appreciate that Norfund’s additional credit support played an instrumental role in helping make the financing package viable.”