(Bloomberg) -- Funding has been completed for Mozambique’s $652 million Central Termica de Temane power station, a gas-fired plant intended to take one of the world’s poorest nations through the green-energy transition.
The 450-megawatt project in Inhambane Province will start producing power in 2024, Globeleq Inc. said in a joint statement on the financial close with its partners, state-owned Electricidade de Moçambique and Sasol Ltd. The broader project, including gas development and regional grids, will draw more than $2 billion of investment, the companies said.
While climate change has spurred increasing opposition to new fossil fuel projects, African officials say gas will be needed in the transition to renewable energy sources. The continent also needs to boost electricity supply to accelerate economic growth. The Temane project will support Mozambique’s transition to net zero by 2050 and complement clean-energy generation, according to the partners.
The International Finance Corp., U.S. International Development Finance Corp. and the OPEC Fund for International Development are involved in funding. The Multilateral Investment Guarantee Agency has provided political risk insurance to the private sector equity investors.
“This pioneering project has the potential to deliver significant economic and social benefits by helping meet Mozambique’s growing demand for power, support the country’s economic recovery and the region’s energy transition,” Linda Munyengeterwa, the IFC’s regional industry director for infrastructure, Middle East and Africa, said in the statement.
The plant will be capable of meeting the electricity demand of about 1.5 million households, and can be upgraded “to handle high hydrogen content,” the partners said. It will create about 830 jobs during construction and 90 permanent jobs when operating. The plant will supply power to EDM under a 25-year agreement.
(Adds MIGA providing political risk insurance in fourth paragraph)
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