The Temane regional energy initiative says it is making significant progress on securing debt funding for the Central Termica de Temane (CTT) project, in Mozambique.

CTT is expected to achieve financial close by the second quarter of next year and provide first power in the fourth quarter of 2023.

The Temane initiative was initiated by Mozambique State-owned energy utility Electricidade de Moçambique (EDM) to help improve the country’s energy security.

CTT will be a 450 MW gas-fired power plant, located in the Inhambane province, supplying low-cost and reliable power to EDM through a 25-year tolling agreement.

Gas supply will come from the production sharing agreement concession at the Pande-Temane Inhassoro fields operated by Sasol Petroleum Mozambique. 

Globeleq is the lead developer along with its partners – EDM, Sasol Africa and eleQtra.

CTT will receive funding of up to $200-million from the US International Development Finance Corporation and up to $50-million from the Organisation of the Petroleum Exporting Countries (Opec) Fund for International Development once execution of the loan agreements and other closing conditions have been finalised.

This complements a public-sector term loan Opec extended to the Mozambique government to finance 563 km of associated transmission infrastructure.

The International Finance Corporation is expected to provide the balance of the required debt financing and is in the process of finalising its approvals.

The technical solution for the project has also been finalised, confirms Temane.

Through a competitive procurement process, Spanish contractor TSK has been selected to design and build the power plant, which will use efficient and well-proven Siemens gas turbines.

TSK has extensive experience in designing similarly-sized combined-cycle power plants using the Siemens turbines.

“The Temane initiative is an absolute regional game-changer. It will ensure a reliable and affordable power supply - crucial elements for economic and social development.  CTT will provide electricity access to millions of people in the region,” Globeleq CEO Mike Scholey says.

CTT will anchor the development of the 563 km high-voltage transmission line and associated transmission infrastructure − the Temane Transmission Project (TTP).

Together with the gas supply and related value chain investment, the entire project will see an investment in excess of $2-billion.  Funding for the TTP project was secured in July 2019 with grants and guarantees from the World Bank, the Norwegian Trust Fund, African Development Bank, Islamic Development Bank and the Opec Fund.

The Mozambique government targets reaching universal electricity access by 2030.

EleQtra CEO Gad Cohen says his company is delighted that the project has achieved this critical milestone with the approval by the US International Development Finance Corporation and the Opec Fund.

“It is another example where the partnership between the private sector and financing institutions can overcome the critical challenges facing the energy sector of countries such as Mozambique.”