WASHINGTON, September 28, 2017 — The World Bank approved today an International Development Association (IDA)* $150 million grant in support of Mozambique’s energy sector. This grant will help Mozambique’s electricity utility company EDM improve the operational capacity of its electricity network as well as its operational efficiencies.
Mozambique made significant strides in expanding access to electricity in recent years, which now reaches 26 percent of the country, from 6 percent in 2006. All administrative centers country-wide have energy access. Against the backdrop of these developments, EDM faces increasing issues of efficiency and reliability of its electricity. The total system losses were estimated at 26 percent in 2016, higher than the weighted average for Sub-Saharan Africa. The country also faces other bottlenecks such as poor network infrastructure; lack of a countrywide and interconnected transmission systems, among others.
“I am pleased with the approval of this grant, especially in these times of much need public investment in this crucial sector,” said Mark Lundell, World Bank Country Director for Mozambique, Madagascar, Mauritius, Seychelles, and Comoros. “This IDA grant is aligned with our strategy, Country Partnership Framework, and the Government’s own Five Year Plan which targets expanded infrastructure to enhancing the productive sectors of the economy and achieve economic diversification.”
The bulk of this financial support ($117.0 million equivalent) will assist the rehabilitation and upgrading of network infrastructure to improve security and reliability of electricity supply through the reinforcement of transmission and distribution lines, installation of additional transformers to increase capacity, and reactive compensation equipment in the cities of Maputo, Matola, Nacala, Pemba, and Lichinga. The remaining amount will be used to support EDM’s operational and commercial operations ($29.5 million equivalent); the company’s capacity building and implementation support ($1.5 million equivalent); as well as capacity building support for the Ministry of Mineral Resources and Energy ($2.0 million equivalent).
“Mozambique Power Efficiency and Reliability Improvement Project is part of a comprehensive World Bank program of support to the power sector in Mozambique, and represents a coordinated and complementary effort from other development partners supporting the development of the sector,” said Zayra Romo, World Bank Senior Energy Specialist and Task Team Leader of this operation. The project builds on the lessons learned from the recently implemented World Bank-supported Transmission Upgrade Project; and the Energy Development and Access Project, among other past investments.
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 75 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.5 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $18 billion over the last three years, with about 54 percent going to Africa.