Mozambique government troops have grappled with an insurgency since 2017. Although this national security matter could deter foreign development and investment, the presence of independent power producers currently working in the region prove some companies do not deem it a risk, according to the head of the Africa Solar Industry Association (AFSIA).
The political instability that has characterized Mozambique during the last six years seems not to have deterred independent power producers from building or planning large-scale PV projects across the country, according to AFSIA CEO John van Zuylen.
Mozambique security forces have fought militant jihadists in the gas-rich Cabo Delgado province since 2017. According to the non-governmental organization the Armed Conflict Location & Event Data Project (ACLED), over 4,330 people have died in the conflict and almost one million people have been displaced.
Van Zuylen, who heads up the continent’s 80-member strong solar association, told pv magazine that solar businesses such as SolarCentury, ACWA Power and Globeleq are currently operating in the country, among others.
The solar expert said that although some foreign companies and investors may be discouraged from doing business in the area due to the insurgency, others may not be “perceiving that risk”.
“It probably limits some of the international companies to really consider Mozambique, but then again, it also attracts other companies, which would otherwise not be interested,” he said. “You also have developers who are looking for that risk element because they know that in exchange of that risk they may demand a higher level of return on their investment.”
Asked about the moral implications of investing in countries with high levels of instability, Van Zuyle said that AFSIA does not judge the internal decisions made by private companies or public institutions. “I did not say that some companies exploit a conflict for financial gain. Saying this would be incorrect. Different companies evaluate country and project risks on a different basis and have a different perception of risk levels on various factors.”
Speaking more broadly about Mozambique’s solar sector, van Zuylen said the PV industry is growing due to the discovery of gas which “fuels everything”. In November 2022 the President of Mozambique Filipe Jacinto Nyusi inaugurated the solar Coral-Sul FLNG installation, located at the northern Rovuma Basin, which is expected to generate 500 billion m3 of natural gas.
But van Zuylen also credited the country’s success to political will.
According to Brussels-based solar analytical firm SolarPower Europe, Mozambique’s “huge solar potential” is starting to be realized due to recent reforms. The most noticeable is the Renewable Energy Auctions Programme (PROLER) set up in 2020 by the Mozambique government with funding from the European Union.
PROLER’s main goal is to tender four renewable energy projects – three solar and one wind – with a unit capacity of 30 MW to 50 MW interconnected to the grid, the program’s website said. The aim is to facilitate 120 MW of renewable energy projects.
Mozambique recorded 108 MW of solar installed capacity at the end of last year, according to the International Renewable Energy Agency (IRENA). But this is almost double the capacity of the year before (64 MW).
Major projects in the country include the 19 MW Cuamba solar PV and 7 MW energy storage plant in Cuamba, in the country’s north, which was switched on two months ago. The project is managed by independent power producer Globeleq and Mozambique’s national utility, Electricidade de Moçambique (EDM), among others.
Van Zuylen said major utility-scale projects are driving the country’s solar success and they are only possible with government backing, such as the PROLER scheme.
He said the commercial and industrial PV sector is another major industry driver and is being led by affordable solar and storage equipment prices. “More and more people are now in a position to say solar-plus-storage has become a viable source for them,” he said. “They’ve been facing the same issues with unreliable or lack of electricity supply on the grid and so because they’re businesspeople, they need to conduct business and when a solution finally becomes viable, they don’t think too long.”
One of the biggest issues facing the local PV sector is the language barrier, van Zuylen said. Not enough people in the international development community speak Portuguese and not enough people in Mozambique speak English. “I don’t have factual evidence to prove this, but I know that this is a limiting aspect,” he said.
Van Zuylen said that a decade ago, the Mozambique government rolled out a favorable feed-in tariff scheme for solar installations. He said at the time it was one of the most progressive incentive programs of its kind in Africa. But because the notification was written in Portuguese, “very few people” were taking advantage of it, he said.
Despite this, now, “clearly, there is activity,” he said. “There’s a lot to be done in the country. A lot to be built. And it’s also growing now, the economy’s growing.”