Development finance institution the International Finance Corporation (IFC) has signed a collaboration agreement with the Mphanda Nkuwa Hydroelectric Project Implementation Office (GMNK) to develop a 1 500 MW hydropower project and associated transmission facilities to increase access to clean energy in Mozambique and other Southern African countries.

The estimated $4.5-billion project will comprise a dam, a power station and a high-voltage transmission infrastructure of 1 300 km from the project site, in the Tete province, to the capital Maputo, and is scheduled for completion in 2031.

“Once complete, the Mphanda Nkuwa Hydropower Project is expected to supply power to meet the growing domestic demand in Mozambique and transform the country into a regional energy hub.

“The rest of the project’s output is expected to be exported to neighbouring countries, including South Africa, where demand for clean energy is high. The project will also accelerate the transition to clean energy to combat climate change in Southern Africa,” the IFC said.

The IFC will work with the government in collaboration with GMNK to structure this important project, including the review of technical design, environmental safeguards, and commercial and financial structuring.

The goal is to help mobilise competitive private investment to bring the project into commercial operation and support the country’s sustainable energy transition.

“Clean and sustainable energy is a key driver of economic and social development. We are pleased to leverage IFC’s experience in developing and financing large hydropower projects in Africa and globally to boost Mozambique’s supply of affordable renewable energy and meet the country’s growing demand for power,” says IFC senior country manager for Mozambique Carlos Katsuya.

“Mphanda Nkuwa is poised to support the achievement of the [Mozambican] government’s vision of universal access to electricity by 2030, stimulate industrialisation and boost growth through reliable transmission infrastructure and competitive power,” adds GMNK director Carlos Yum.