Mozambique´s Cahora Bassa hydro plant will get a EUR125 million financing from the African Development Bank Group (AfDB) to modernize its production system.
The credit will support the African country´s hydroelectric “vital Capex program aimed at modernizing the company’s electricity production system”, according to an AfDB statement following the approval by its Board of Directors
Hidroeléctrica de Cahora Bassa (HCB) is the largest Independent Power Producer (IPP) in Southern Africa, provides hydroelectric power to Mozambique and the Southern African Development Community (SADC).
“The modernization will extend the life of the plant by at least 25 years, enhance the reliability of energy delivery, reduce outages and enable the company to fulfil its contractual obligations to its off-takers and enhance regional integration of the electricity sector in SADC”, the AfDB says.
“It will also ensure the sustainability of energy security of the Community, particular South Africa, Mozambique and Zimbabwe”, the bank adds.
The package comprises up to EUR100 million from the African Development Bank and up to EUR25 million from the Africa Growing Together Fund.
The Vice President of the African Development Bank’s Power, Energy, Climate Change and Green Growth Complex, Kevin Kariuki, said: “HCB’s increased capacity, enhanced reliability, and ability to provide ancillary services will facilitate greater integration of variable renewable energy sources such as solar PV and wind in the wider region.”
Also commenting, the Bank’s Director for Energy Financial Solutions, Policy & Regulations, Wale Shonibare, said: “the Bank’s support to HCB is well aligned with its vision of integrating African electricity markets to promote the supply of affordable and reliable electricity to consumers in the region.”
The loan aligns with one of the Bank’s “High Fives” objectives to “Light Up and Power Africa” under its New Deal on Energy for Africa.