The international groups are in the race to became strategic partners to the 1500MW – US4.5B Mphanda Nkuwa hydroelectric project.
After a very competitive tender process with the participation of many major international players, the office in charge of Mozambique’s Mphanda Nkuwa super dam announced the finalists this weekend.
The 1500MW Mphanda Nkuwa hydroelectric is a US$4.5 Billion project (including US$1.2B estimate high voltage 1300km transmission grid) located in Mozambique’s northwest province of Tete, poised to become a key pillar in the solution of energy demand in the region.
The international tender process to select a strategic partner to team up with Mozambique’s national electric company (EDM) and the Cahora Bassa hydroelectric (HCB) began last year with strong support from the World Bank, the African Development Bank (AfDB), the International Finance Corporation (IFC) and the Southern Africa Power Pool (SAPP).
Last Friday (March 10th), as the process came to a closing, Mphanda Nkuwa hydroelectric project implementation office announced that there are now two international consortia competing for Mozambique’s super dam, they are:
- ETC Holdings, ZESCO Limited, CECOT (a subsidiary of Mota-Engil) and PetroSA (A subsidiary of Central Energy Fund, South Africa) and;
- Électricité de France (EDF), Total Energies and Sumitomo Corporation
During the pre-qualification, seven international companies or consortia were selected: Kansai Electric Power Co. Inc., ETC Holdings Consortium, PowerChina Consortium, Sumitomo Corporation, EDF and TotalEnergies Consortium, China Energy and Energy China Consortium, SCATEC and SN Power Invest Netherlands B.V.
According to the implementation office, the next stage will consist of the evaluation of the proposals, in accordance with Mozambique’s Public Private Partnership Law, by an Evaluation Committee chaired by the Ministry of Mineral Resources and Energy and constituted by EDM, HCB, the Ministry of Economy and Finance, the Ministry of Land and Environment, the Ministry of Labour, Employment and Social Security and the Bank of Mozambique.
The implementation office also noted that the selection will be based on the criteria of technical capacity, financial strength, and international experience, specifically in the development of hydroelectric projects. In addition to these requirements, the proponents will need to contract a tender financial guarantee in the amount of US$10M.
The selected consortia will be responsible for investing between US$500M and US$700M as their equity share in the total investment required.
A strong step towards regional energy transition
Mozambique continues to position itself as a regional green transition powerhouse. Once Mphanda Nkuwa goes online, the 1500MW hydropower plant will supply 9,000 GWh of clean electricity to the Southern Africa Power Pool thereby displacing an estimated 8 million tons of carbon dioxide emissions per year.
The project will critically contribute to the green transition domestically and regionally and not only will provide a flexible and reliable source of baseload power, but also play an essential role in the transition towards green industrialization and electric mobility in the medium and long term for the entire region.
According to the implementation office, the project is being implemented in strict compliance with internationally accepted global standards and tools for social, environmental, and governance (Environmental Social and Governance, ESG) for mitigating negative impacts and maximizing positive aspects, assessment and certification, which privilege the creation of opportunities for local communities, minimize and mitigate the adverse impact on the biodiversity heritage.
The project is said to be the lowest-cost option for power generation. It will position Mozambique as a regional energy hub, and contribute to universal access and industrialization, job creation, technical training, and energy exports.
With two international consortia competing for Mozambique’s super dam, it becomes clear that the project will be fundamental for the process of energy transition and decarbonization in the Southern region of the African continent.