AfrElec: MIGA issues 20-year guarantees for Mozambique’s CTT

The Multilateral Investment Guarantee Agency (MIGA) has issued guarantees of 20 years for the 450-MW Central Térmica de Temane (CTT) power generating plant in Mozambique.

MIGA, an arm of the World Bank Group (WBG), said on December 21, 2021 that risk guarantees of $251.3mn had been issued to investors in the plant in northern Inhambane Province against breach of contract and transfer restriction.

Contracts issuing guarantees to Globeleq Africa Ltd, Moz Power Invest and Sasol Africa Proprietary Ltd for equity and quasi-equity investments in CTT were issued on December 8, 2021.

The natural gas-fired CTT, which is set to be located approximately 30 kilometres south-west of the town of Inhassoro and about 20 km inland from the coastline of Mozambique, will be an independent power producer (IPP).

“The project will be an IPP generating an average of 3,143 GWh annually (under current dispatch assumptions) for sale to Electricidade de Moçambique E.P. (EDM) under a 25-year tolling agreement,” said MIGA. 

MIGA said power produced by the project will be injected into the national grid and sold by EDM to Mozambican end-consumers and to neighbouring countries under bilateral contracts or through the Southern African Power Pool. 

The termination payment obligations of EDM will be guaranteed by the Government of Mozambique, represented by the Ministry of Mineral Resources and Energy (MIREME). Construction is expected to begin in January 2022 and operations around November 2024.

MIGA said CTT will provide increased affordable and reliable power, to meet growing energy demand in Mozambique, and will increase the generation capacity available for export.

Support for the project “aligns with the WBG’s Country Partnership Framework and MIGA’s strategic focus on International Development Association countries and conflict-affected countries,” said MIGA.

The project will increase installed capacity in a country with a low electricity access rate and support regional interconnectivity within Mozambique and neighbouring countries in the Southern Africa region.