Mozambique and South Africa

The governments of Mozambique and South Africa are accelerating negotiations on the speedy implementation of projects to increase electricity production and fill the neighbouring country’s energy deficit. “There is interest in the alignment between the governments of Mozambique and South Africa so that we can swiftly implement projects that lead to the production of more electricity,” Minister of Mineral Resources and Energy Carlos Zacarias told journalists in Inhambane during a recent visit to monitor implementation of oil and gas projects there. One way to increase supply is the projected Mphanda Nkuwa hydroelectric project, which is expected to produce 1,500 Megawatts and associated energy transport infrastructure.

At an estimated cost of US$4.5 billion, the project includes the development of a dam, a power plant capable of producing up to 1500 Megawatts and a 1,300-kilometre high-voltage power transmission line from Tete province to Maputo. Completion of the project is scheduled for 2031. The minister said that the combined-cycle power plant project using gas, the construction of a cooking gas factory facilities, and the power transmission line between Temane and Maputo would also help supply South Africa. 

The Temane Thermal Power Plant project follows a Production Sharing Contract (PSA) involving the Government of Mozambique, the National Hydrocarbon Company (ENH) and the South African multinational SASOL, estimated at around US$760 million. It foresees the production of 4,000 barrels of light oil per day, 23 million gigajoules of natural gas for energy generation per year, and the production of 30,000 tons of liquefied petroleum gas (LPG/cooking gas).

The natural gas to make the Temane Thermal Power Plant Project (CTT) viable will be supplied by ENH and SASOL, named as co-sellers of the product in a contract signed with Electricidade de Moçambique (EDM) in May, 2021. This plan will guarantee the generation of 450 Megawatts of electricity and results from a public-private partnership formed and led by Globeleq, EDM and SASOL, with a concession valid for 25 years. At the end of the contract, the asset will be transferred to the Mozambican state. The US$652.3 million Central Termica de Temane will produce electricity in a combined cycle generation model based on natural gas which will be supplied to EDM for distribution in the national market. Any surplus will be exported to the region.