Gigawatt Mozambique, which operates a 120-megawatt natural gas power plant in Ressano Garcia, Maputo Province, shared at the seminar “The Journey of Financing Energy and Gas Projects in Mozambique” the main challenges and solutions in securing financing for energy projects in the country. Administrator Bruno Morgado emphasized the importance of the anchor customer, the positive impact of natural gas infrastructure, and the need for strategic partnerships to overcome financial, technical, and bureaucratic barriers limiting the sector’s development.
The event took place in Maputo as part of the Executive Course “Capital Markets in Mozambique,” organized by the Pedagogical University – Faculty of Economics and Management, in partnership with the Transformation and Acceleration Center (CTA) and FINANTIA. This was the second open initiative of the course, aimed at strengthening knowledge and technical capacity in the capital market and Mozambique’s energy sector.
During his intervention, Bruno Morgado used Matola Gas Company (MGC) as an example, explaining that the installed natural gas infrastructure, which includes a 90-kilometer high-pressure pipeline and an additional 50 kilometers of low-pressure distribution, was only possible thanks to the anchor customer principle. “The only client MGC had to guarantee its financial bundle was Mozal. Without Mozal, there would have been no infrastructure allowing expansion to other industries and the operation of compressed natural gas,” he stated.
The administrator also highlighted the environmental benefits of replacing polluting fossil fuels with natural gas. “For those living in the Amatola area, they know what the cement pollution caused. With natural gas, that disappeared,” he emphasized, underlining the positive impact on the quality of life of industrial communities.
Morgado explained that the financing process was complex, involving everything from mobilizing equity to negotiating with financial partners and multilateral institutions such as the World Bank and political risk insurers. “We started with equity in the first six months, risking everything, including an apartment as collateral,” he revealed, highlighting the challenge of high interest rates that reached 14% in dollars, which he considered “an atrocity” for infrastructure projects. Another example presented was the Gigawatt project, located in Ressano Garcia, operating a natural gas power plant with 120 megawatts of installed capacity. Morgado explained that the project’s success resulted from an effective strategy to identify market opportunities and attract investment, supported by partners like Standard Bank, the World Bank, and the insurer MIGA.
Technical capacity building was also identified as a key factor, with the hiring of specialized partners for operation and maintenance, aiming to transfer knowledge to Mozambicans. “It didn’t always go as planned, but it was essential to secure the banks’ trust,” he acknowledged.
Regarding structural barriers, the administrator warned of the high country risk and the consequent reluctance of financiers, especially since the national banking sector is still incipient and most financing comes from abroad. “We have to create schemes to strengthen national banks and thus finance projects of this scale,” he advocated.
Morgado also stressed bureaucracy and lack of agility as significant obstacles, calling for strong leadership and close cooperation between the public and private sectors to overcome these difficulties. He underlined that “setting clear and realistic goals and having a greater appetite for risk are decisive for success.”
The anchor customer concept was reiterated as crucial for project sustainability and attracting financiers. The administrator also pointed out existing opportunities in the regional market, with an estimated need of 44,000 megawatts in southern Africa.
The seminar concluded with the awarding of participation certificates to the executive course trainees, reinforcing the commitment to training and sustainable development of the energy sector and capital markets in Mozambique.
Text: Felisberto Ruco
