Mozambique: US$ 31.14 Million ADF Loan in Support of Energy Sector
Tunis, 13 August 2006 – The Board of Directors of the African Development Fund (ADF) approved on Wednesday in Tunis, a loan of 26.30 million Units of Account (UA*), equivalent to US$ 31.14 million to finance the 4th Electricity Project in Mozambique.
The objective of the project is to provide electricity in order to meet long-term demand and to improve the electricity access, reliability, and quality of supply to consumers in Sofala and Manica provinces.
It is expected to provide economic sectors and households with reliable, adequate and cheap energy, in a sustainable manner, to enhance economic growth and reduce poverty.
The purpose of the government’s involvement in the electricity sub-sector is to increase access to affordable and sustainable electricity supply to support economic growth and poverty reduction. To achieve this objective, the country will secure its electricity supply through a diversity of economically competitive and reliable sources, with emphasis on the development of its indigenous hydro resources for internal and external markets.
The components of the project are:
- Construction of 220 kV power transmission line ;
- Construction of Substations:-B1-Extension of a 220 kV Substations at Chibata and construction of a new 220/110 kV substation at Dondo and B2-Rehabilitation of 110/22 kV substations;
- Distribution Network;
- Energy Meters;
- Project Engineering, Supervision and Management;
The total population of the project area is about 2.9 million, of which only 5.3% has access to electricity. On completion, the project will improve electricity supply to an estimated 79,364 existing customers, (including households, schools, health service facilities, water supply facilities, mills and shops/restaurants; and commercial plantations, fishery processing installations, industries such as cement plants, steel works, railway facilities on the Beira corridor.
The overall cost of the project is estimated at UA 38.69 million, about US$ 57.59. The ADF loan will cover 68% of the costs. The remaining cost will be covered by OPEC and the Mozambican Electricity company (EdM).
The ADB Group began operations in Mozambique in 1977. To date, its commitments in the country stand at US$ 1.3 billion in 93 operations.