Central Termica de Ressano Garcia
The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, signed, effective April 6, 2022 and for a period of up to 8 years, contracts of guarantee with Absa Bank Limited of South Africa (Absa) for up to US$36.5 million, to cover the principal, interest and associated interest rate swap of Absa’s non shareholder loan to Central Termica de Ressano Garcia S.A. (CTRG), a power generation project in Mozambique (the Project), against the risks of Transfer Restriction, Expropriation, War and Civil Disturbance, and Breach of Contract.
In relation to the same Project, MIGA also signed another guarantee for US$149.85 million with Azura CTRG Holdings Limited of Mauritius (Azura) for their equity and quasi equity investments in CTRG, covering against the risks of Transfer Restriction and Breach of Contract. The contract became effective April 19, 2022, for a period of up to 13 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.
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.
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).