The government plans to resort to public and private financing and the issuance of sovereign debt for the materialisation of the Energy Transition Strategy (ETS), given that investments valued at 80 billion dollars are needed.
“Given the magnitude of the funding needed to implement the ETS, various sources of funding and financial instruments will be used, including public and private, national and international institutions. For the utilisation of sovereign debt, it will be essential to coordinate efforts so that the country’s debt capacity is not compromised and that the financing strategy is adapted to Mozambique’s fiscal reality,” explains the document approved by the Executive last year.
According to the government, the ETS represents an ambitious vision for transforming and expanding the country’s energy system that will provide a significant and lasting impact on the people, boost industrialisation and support regional and global efforts to combat climate change.
“Securing funding for key infrastructure assets and equipment is vital to realising this goal. The ETS programmes involve a range of investments and needs from infrastructure projects to equipment costs. You have to have a hydroelectric dam or clean cooking solutions and implement regulatory reforms,” he clarifies.
“The initial estimate indicates that the investments needed for the ETS require 80 billion dollars between 2024-50. Most of the funding before 2030 will go to the electricity sector, with hydropower and grid expansion accounting for the largest share,” he points out.
The development of photovoltaic and onshore wind farms to connect to the national grid also represented important investments, but will require funding after 2030.
According to the document, in addition to large-scale energy production on the grid, the promotion of energy access solutions and the decarbonisation of transport are described as vital elements to be guaranteed in financing.
“The expansion of mini-grids alone will require around 2 billion dollars,” it concludes.
