Mozambique’s national utility Electricidade de Mocambique (EDM) has received a senior loan debt facility of $81.3-million from the Development Bank of Southern Africa (DBSA) for the rehabilitation and upgrade of the country’s energy supply network.
This financing support is in line with Mozambique’s plans to upgrade the country’s power network to provide universal electricity by 2030.
EDM has also launched several other projects aimed at strengthening the transmission grid and improving distribution capacity in the country.
Phase 1, which comprise two of the 12 projects, is ready for implementation at an estimated cost of $81.3-million. These two projects are located in Pemba and Maputo.
The DBSA loan facility will be advanced directly to EDM as a 15-year senior debt facility, where Mozambique’s development bank Banco Nacional de Investimento (BNI) will serve as the due diligence and project evaluation partner in addition to providing capital raising and advisory services.
BNI and DBSA are strategic partners as part of a long-standing memorandum of understanding with the objective to forge localised support and to enhance regional development finance institution partnerships and cooperation.
“We have been working with EDM and BNI for the past four years with funding solutions to rehabilitate its electricity network in the cities of Maputo and Pemba,” said DBSA group executive Zodwa Mbele.
DBSA is the only lender in the transaction.
Mbele added, however, that “what is noteworthy” was that DBSA made a strategic decision to assist Mozambique and its utility when no other lender was prepared to assist the country during a time of need while also heeding a call from the Mozambican government to get involved in infrastructure projects.
EDM’s COO commented that BNI was instrumental in negotiating guarantees on behalf of the government of Mozambique.
“We believe the energy sector offers significant opportunities to provide both social and economic development in Mozambique with an anticipated 284 000 households receiving connectivity and stable power connection,” DBSA Southern African Development Community coverage division head Davies Pwele commented.
The DBSA’s role as a key development partner in Mozambique goes back a long time with support and investment unceasing in supporting the country’s critical energy infrastructure projects, he concluded.