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Central Térmica de Temane

$251.3 million
Summary of Proposed Guarantee

Project description

This summary covers applications by: (1)  Globeleq Africa Limited (Globeleq) of the United Kingdom; (2) Sasol Africa Proprietary Limited of South Africa, and (3) Moz Power Invest, S.A. of the Republic of Mozambique (or any of their subsidiaries/ affiliates yet to be identified) for each of their equity, shareholder loan, and/or quasi-equity investments in the Central Térmica de Temane gas-fired power plant project in the Republic of Mozambique. The investors seek cover for up to USD 251.3 million against the risks of transfer restriction and inconvertibility and breach of contract for a guarantee period of up to 20 years.

The project consists of the design, construction, commissioning, possession, ownership, operation, supply of tolling services, maintenance, financing and management of the 450 MW (net capacity) Central Térmica de Temane greenfield gas-fired power station, insurance of said activities and of assets and income associated thereto, the conversion by the power station of natural gas as supplied by EDM into electricity on behalf of EDM by making available to EDM the net dependable capacity and net electrical output of the power station in consideration for payment, the interconnection with the national transmission network, use of water resources, and the provision of incidental services and all related activities (the Project or CTT).  The Project will be an independent power producer, generating an average of 3,143 GWh annually (under current dispatch assumptions) for sale to Electricidade de Moçambique E.P. (EDM) under a 25-year Tolling Agreement.  The electricity produced by the Project will be injected into the national grid and sold by EDM to Mozambican end-consumers and to neighboring countries under bilateral contracts or through the Southern African Power Pool.  The termination payment obligations of EDM will be guaranteed by the Government of Mozambique represented by the Ministry of Mineral Resources and Energy (MIREME).  Construction is expected to begin in April 2021 and operations approximately two and a half years later.

The project is located in northern Inhambane Province, Mozambique, approximately 30 km southwest of the town of Inhassoro, 20 km inland from the coast.

Environmental Categorization

The project is a category A under MIGA’s Policy on Environmental and Social Sustainability.  This is a joint project with the International Finance Corporation (IFC).  Click here  to view the Environmental and Social Review Summary prepared by IFC for their proposed support to the project.

Development Impact

The Central Térmica de Temane will provide increased affordable and reliable power to meet growing energy demand in Mozambique and will increase available generation capacity for export. The Project will increase installed capacity in a country with a low electricity access rate and support regional interconnectivity within Mozambique and its neighboring countries. This Project may also lead to positive demonstration effects for further private sector investments in Mozambique’s energy sector. Support to the Project aligns with the WBG’s Country Partnership Framework and MIGA’s strategic focus on International Development Association countries and conflict-affected countries.