The World Bank will finance the Mphanda Nkuwa hydropower project in Mozambique, valued at US$6.4 billion (406.4 billion meticais). It will be the largest hydroelectric plant built in Southern Africa in half a century, Engineering News reported on Monday, July 21.
According to the outlet, the pledge was made by World Bank President Ajay Banga during a visit to the country. The support will include debt and equity financing, as well as risk guarantees and insurance. The project consists of the Mphanda Nkuwa dam, budgeted at US$5 billion (317.5 billion meticais) on the Zambezi River, and an associated power transmission project estimated at US$1.4 billion (88.9 billion meticais).
“We want to be the energy hub of our region, the Southern African Development Community (SADC),” said President Daniel Chapo to Bloomberg, underscoring the country’s ambition to become a regional player in the energy sector.
With an installed capacity of 1,500 megawatts (MW), the plant is expected to become operational around 2031 and is part of the World Bank’s “Mission 300” program, which aims to provide electricity access to 300 million people in Sub-Saharan Africa by 2030. The region accounts for over 80% of the 680 million people globally who still live without electricity.
The consortium responsible for building the dam includes Éléctricité de France, TotalEnergies, and Sumitomo Corporation. The Mozambican state, through Hidroeléctrica de Cahora Bassa (HCB), will also hold a stake in the project. The World Bank’s International Finance Corporation (IFC) will provide part of the financing and acquire equity in the dam. The International Bank for Reconstruction and Development (IBRD) will issue risk guarantees, while the International Development Association (IDA) will concessionally finance the 1,300 kilometers of transmission lines. The Multilateral Investment Guarantee Agency (MIGA) will provide political risk insurance.
These transmission lines will be built with direct government credit and will integrate Mphanda Nkuwa’s production into the southern electrical grid—one of Mozambique’s three isolated grids—ensuring supply to regions such as Maputo and enabling exports to neighboring countries like Zambia, Malawi, and Zimbabwe.
The project is located downstream from the Cahora Bassa dam, built in 1974, with a capacity of 2,075 MW. Currently, about 60% of Cahora Bassa’s electricity is exported directly to South Africa, reflecting its colonial-era design.
The new facility will be built with a reservoir significantly smaller than Cahora Bassa’s, which spans roughly 3,000 square kilometers. The aim is to reduce environmental and social impact, setting it apart from the Kariba reservoir, also on the Zambezi, which covers over 5,000 square kilometers and is the world’s largest man-made reservoir by volume.
According to Ajay Banga, the project is part of a five-to-ten-year plan to expand Mozambique’s energy capacity. The plan includes the construction of additional upstream plants with 400 MW and 200 MW, boosting Cahora Bassa’s capacity by more than 50%, and developing a 400 MW solar plant. Some of these initiatives may be incorporated into a new partnership framework between Mozambique and the World Bank.
In addition to increasing revenue from electricity exports—which reached US$240 million (15.2 billion meticais) last year—the government also aims to promote local mineral processing (e.g., graphite and beryllium) and accelerate electricity access for its population. Currently, about 64% of Mozambique’s 33 million inhabitants have electricity, double the rate from 2018.
Source: DE
