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Central Termica de Ressano Garcia

$220 million
Summary of Proposed Guarantee

Project description

This summary covers potential MIGA guarantees related to the Central Termica de Ressano Garcia S.A. (CTRG) project in Mozambique: (i) of up to US$ 60 million, to Absa Corporate and Investment Bank (Absa), a division of Absa Bank Limited of South Africa, for its non-shareholder loan (including principal, interest, and interest rate swap) to CTRG; and (ii) of up to US$ 160 million, to Azura CTRG Holdings Limited of Mauritius, for  its equity (including future retained earnings) and quasi-equity/shareholder loan (including interest) investments in CTRG. The investors have applied for MIGA guarantees against various elective risks (expropriation, war and civil disturbance, transfer restriction, and breach of contract), and for elective periods of up to 15 years.

The project involves the ownership, operation, and transfer of an existing 175 MW natural gas-fired power plant located at Ressano Garcia, Mozambique, near the southern border with South Africa. The project is evacuating power into existing transmission infrastructure managed by Electricidade de Moçambique E.P. (EDM), the Mozambican power utility. The project is one of the first internationally-financed Independent Power Producers (IPPs) of Mozambique.

Environmental Categorization

The project is classified category B under MIGA’s Policy on Environmental and Social Sustainability. Click here to view the Environmental and Social Review Summary.

Development Impact

The Project delivers electricity to the highly underserved local market by using indigenous gas resources. CTRG brings generation capacity closer to the southern load center, where demand is concentrated. This Project may also lead to positive demonstration effects for further private sector investments in Mozambique’s energy sector. The Project is aligned with the World Bank Group’s Country Partnership Framework for Mozambique, which calls for expanding access and improved reliability of power supply to support growth and productivity. It is also aligned with MIGA’s strategic priority of expanding its footprint into countries eligible for concessional financing from the International Development Association (IDA).