Mozambique: African Development Bank approves €125 million loan for hydropower producer to modernize production system | African Development Bank

The Board of Directors of the African Development Bank Group has approved a loan package of up to €125 million to Hidroeléctrica de Cahora Bassa (HCB) in Mozambique to support the Vital Capex program aimed at modernizing the company’s power generation system.

HCB, the largest Independent Power Producer (IPP) in Southern Africa, supplies hydropower to Mozambique and the Southern African Development Community (SADC).

The package included up to €100 million from the African Development Bank and up to €25 million from the Africa Growing Together Fund.

The modernization will extend the life of the plant by at least 25 years, improve the reliability of the energy supply, reduce disruptions and enable the company to meet its contractual obligations to its customers and improve the regional integration of the electricity sector in SADC. It will also ensure the sustainability of the Community’s energy security, in particular South Africa, Mozambique and Zimbabwe.

The Vice President of the African Development Bank’s Power, Energy, Climate Change and Green Growth Complex, Kevin Kariuki, said: “We are delighted to support the Vital Capex program given HCB’s central role in the Southern African Power Pool. In addition, HCB’s increased capacity, improved reliability and ability to provide ancillary services will enable greater integration of variable renewables such as solar PV and wind in the wider region.”

Wale Shonibare, the bank’s director of energy, financial solutions, policy and regulation, also said: “The bank’s support to HCB is well aligned with its vision to integrate Africa’s electricity markets to deliver affordable and reliable electricity to consumers in the region.”

The loan aligns with one of the Bank’s ‘High Fives’ goals to ‘enlighten and empower Africa’ under its New Deal on Energy for Africa.