Gigawatt Mozambique SA

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  On December 3, 2015, MIGA issued $115.4 million in guarantees covering an equity investment by Gigajoule Power (Proprietary) LTD of South Africa and a non-shareholder loan and swap from Standard Bank of South Africa (“SBSA”) for Gigawatt Mozambique SA in Mozambique. The guarantees are for a period of up to 15 years against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract. On May 10, 2021, following a partial transfer of loan participation from SBSA to Absa Bank Limited (acting through its Corporate and Investment Banking division) (“Absa”), MIGA issued a new Contract of Guarantee to Absa in the amount of $17.16 million.  The amount of SBSA's existing non-shareholder loan guarantee has been reduced accordingly. The project involves the construction and operation of a 118 megawatt natural gas-fired power plant near the town of Ressano Garcia in southern Mozambique. The new plant will supply baseload energy capacity to the country. Mozambique's electrification rate of 34 percent is one of the lowest in the world. Demand for electricity is concentrated in the southern part of the country, while most of the installed generation capacity is located in the north and predominately serves the export market to South Africa and Zimbabwe. With the price of electricity in the southern African regional market forecasted to grow rapidly in the next five years due to a surge in power demand, supply constraints are hampering regional economic growth. The project in southern Mozambique will provide a key benefit to the local, highly underserved market through the additional generation of 118 megawatts of energy, at reasonable prices, using gas resources. This project is aligned with the World Bank Group's Country Partnership Strategy for Mozambique, which calls for improved energy access under the pillar of competitiveness and employment. It is also aligned with MIGA's strategic priorities of supporting investments into countries eligible for concessional financing from the International Development Association and investments into complex deals in infrastructure.

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