WASHINGTON, D.C., February 4, 2010 – The World Bank Board of Executive Directors today approved an International Development Association (IDA) credit  of US$80 million equivalent in support of the implementation of the Government of Mozambique’s Energy Development and Access Project.
The overall objective of the project is to increase access to electricity and modern energy services in peri-urban and rural areas in a sustainable and affordable manner. The Project will support the Government of Mozambique to: (a) increase grid-based access to, and improve reliability of, the supply of affordable electricity services in peri-urban areas; (b) increase off-grid access to electricity and modern energy services in un-served rural areas through conventional and renewable energy resources and technologies; (c) leverage the mobilization of multilateral and bilateral donor financing for improving grid-based access to modern energy services through the reinforcement of the existing primary electricity network and the extension of the grid to un-served areas; (d) improve the overall performance of the main sector institutions and their capacity to expand electrification and to mobilize new private sector and donor investment financing through the provision of institutional strengthening and capacity development support; and, (e) support the preparation of a national rural electrification strategy and investment program.
“It’s encouraging to see that this new Bank financing will seek concrete and tangible results for Mozambicans by scaling up electricity connections in peri-urban and rural areas, and by promoting rural and renewable energy resources and technologies, among other undertakings,” said Luiz Pereira da Silva, World Bank Country Director for Angola, Malawi, Mozambique, Zambia and Zimbabwe. “These are important challenges long identified and to which the Bank has demonstrated long-term commitment and support.”
This project is consistent with the Government of Mozambique’s own new energy sector strategy, as well as the Government’s poverty reduction plan (PARPA II), and it builds on other World Bank-funded projects, including the ongoing Energy Reform Access Project and the Mozambique-Malawi Interconnection Project; as well as the Regional Transmission Interconnection Project under preparation, which will provide the transmission capacity to evacuate power generated in the set of “mega-projects” currently under development and consideration in Mozambique (i.e.,Mphanda Nkuwa; Cahora Bassa North, Lurio, Moatize, Benga, etc.).
“This new project approved today will directly support the current push by the Government for rural and peri-urban electrification , a key factor in attracting investments into districts, creating jobs, expanding the provision of health services and access to education, and ultimately contributing to reduce poverty,” said Boris Utria, the World Bank project’s Task Team Leader.
This project is a component of the World Bank’s 2008-2011 Country Partnership Strategy for Mozambique.
 The credit is provided on standard International Development Association (IDA) terms, with a commitment fee of 0.5 percent, a service charge of 0.75 percent, and a 40 year maturity which includes a 10-year grace period.