Globeleq Mozambique Solar Projects - Central Solar de Mocuba

Project description

This summary covers an application by Globeleq Africa Limited (GAL) for its equity and quasi-equity investments in CESOM - Central Solar de Mocuba, S.A. (CESOM) in Mozambique (the Project). GAL is seeking cover for up to USD 11.02 million for CESOM against the risks of transfer restriction and breach of contract for a guarantee period of up to 20 years.  

CESOM consists of a 40.5 MWp solar photovoltaic plant currently in operation in Mocuba, Zambezia Province in Centre-Northern Mozambique. CESOM reached commercial operation date on August 6th, 2019 and was initially developed by Scatec ASA and the Norwegian Investment Fund for Developing Countries, before being acquired by GAL in December 2023. CESOM was the first solar Independent Power Producer (IPP) in Mozambique, and its electricity output is delivered to Electricidade de Moçambique (EDM) under a 25-year power purchase agreement.  

Environmental Categorization

The Project is a 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’s primary development impact will come from the energy delivered to the off-taker and the reduction in GHG emissions savings. Center-northern Mozambique suffers from low electricity access due to its isolation from main generation center in the South, significant transmission losses and an overreliance on power supply from the Cahora-Bassa hydropower plant. As a result, the Project helps improve the security of energy supply in center-northern Mozambique, while diversifying the energy mix. By adding clean energy capacity, the Project also contributes to reduce GHG emissions and decrease the reliance on fossil fuels. Additionally, the Project has market development effects by demonstrating the viability of a utility-scale solar Independent Power Producer (IPP), which should bolster private sector confidence and attract further Foreign Direct Investment (FDI) to the sector. The Project aligns with the World Bank Group's Country Partnership Framework for Mozambique for FY23-27, as it promotes private sector interventions in the renewable energy sector to support the country's electricity access strategy.