A delegation from the European Union (EU) and the German Embassy announced a funding package to support small and medium enterprises in the energy sector in Mozambique affected by the COVID-19 pandemic in order to mitigate the negative effects.
The support will be done through the Sustainable Access to Renewable Energy Fund – FASER, for which, the EU has channeled 5 million euros and the German Government 0.5 million euros. The funding – CovidPlus – aims to alleviate the impact of the pandemic on small and medium-sized businesses.
The beneficiaries are energy companies and the population that does not yet have access to energy, the press release indicates.
“The CovidPlus incentive will play a vital role in ensuring the financial soundness of private companies operating in the energy segment during the Covid-19 pandemic and, at the same time, facilitate these companies to offer special prices and payment terms to their customers, temporarily relieving, their household expenses,” the note reads.
According to the document, more than 20,000 families living in rural areas are expected to have access to energy services through the mechanism. Also, a call for proposals was launched today to select private companies to provide such services.
Speaking about the initiative, the EU Ambassador in Mozambique, Antonio Sánchez-Benedito Gaspar, said that “this contribution to FASER is a smart way to strengthen the capacity of the private sector to provide services, as well as to support the neediest population to obtain them in an affordable and sustainable way”.
The German Ambassador to Mozambique, Lothar Freischlader, meanwhile, said that “EnDev-GIZ and FDC worked intensively in 2020 on ‘rapid response’ mechanisms to ensure continuity of activities and access to energy. Two support mechanisms were introduced through FASER: CovidPay in May and an additional mechanism, CovidPlus, launched in September 2020 with €2.5 million from the Federal Ministry for Economic Cooperation and Development (BMZ).”
Lothar Freischlader welcomed the European Union’s contribution to FASER to join the initiative and for jointly launching the second call for proposals.
Graça Machel, Chair of the Board of Directors of the Foundation for Community Development (FDC), which manages the FASER fund, said that “it is with great joy that we welcome the EU to this joint initiative of EnDev – GIZ and FDC, which since 2019 has ensured access to energy for more than 100,000 Mozambicans, but also, and more importantly, has responded to the urgent needs of vulnerable women and families facing unprecedented challenges resulting from Idai in 2019 and the global Covid-19 pandemic.”
For his part, the Minister of Mineral Resources and Energy, Ernesto Max Tonela recalled that “the Government of Mozambique is committed to providing universal access to energy to its entire population by 2030. In this context, the contributions of the European Union and the German Government play an important role in combining efforts towards this major national goal,” he said.
According to Max Tonela, in 2019, “the creation of the Fund for Sustainable Access to Renewable Energy in Mozambique (FASER) was an important initiative to support the private sector in efforts to provide energy supply services to rural populations residing in locations distant from the National Electricity Grid. The mechanisms introduced by EnDev and GIZ are important to ensure business continuity in the energy access sector in the context of the health and economic challenges resulting from the pandemic we are currently facing.”
FASER is jointly implemented by the German Cooperation Agency (GIZ) through its Energising Development (EnDev) program and FDC. The EU funds are part of PROMOVE, a comprehensive EU approach to rural development in Mozambique.
