Central Térmica de Temane

Project description

On December 8, 2021, MIGA signed contracts issuing guarantees totaling US$251.3 million to Globeleq Africa Limited, Sasol Africa Proprietary Limited, and Moz Power Invest, S.A. for their equity and quasi-equity investments in the Central Térmica de Temane gas-fired power plant project in the Republic of Mozambique. The guarantees are issued for up to 20 years against the risks of transfer restriction and breach of contract.

The project consists of the design, construction, ownership, operation, 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 dependable power generation capacity and  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 January 2022 and operations around November 2024.

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.