Energy Reform and Access Project

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The Energy Reform and Access Project will accelerate the use of electricity for economic growth, and social services, thus, improve the quality of life in un-served, and under-served areas (peri-urban and rural); and, strengthen the country's capacity to increase access to modern energy. The power sector reform component consists of the (a) separation of Electricite de Mozambique (EdM) into several business units; (b) participation of the private sector in EdM's distribution and supply business, through strategic private investments; and, (c) creation of a separate corporate public entity to provide transmission assets, and perform system operation. In establishing the grid-based peri-urban electrification, the project will finance technical assistance (TA) to mainstream lower costs, and designs appropriate for rural, and peri-urban areas. Likewise, consultancy services for design, procurement planning, construction, and supervision will be provided, to support construction of medium voltage lines, and low voltage lines for distribution substations. Training assistance will be financed, as will the supply of equipment necessary for the operation, and maintenance of the extended distribution network, for planning, and project management. The independent grid rural electrification component, will support investments to test the viability of concession arrangements, and of competitive subsidy mechanisms. The renewable energy component will support investments in renewable energy, through a performance based co-financing grant facility. Similar to the independent grid rural electrification component, the co-financing grant will support investments on an output basis, materializing in disbursements, following a satisfactory systems installation. Complementary financing will be raised through private equity, private/Government debt financing, or additional subsidy provision, i.e., bidding for the concessional, and cross-sectoral packages. The TA program will support the creation of sustainable markets for renewable energy, contributing to the achievement of rural economic transformation through targeted, least-cost electricity provisions. Institutional development, and capacity building will seek to strengthen the energy institutions under the Ministry of Mineral Resources and Energy.