Funding Secured for Temane Transmission Project
On August 28, 2019 an event was held to recognize and celebrate the commitment of funding by World Bank, African Development Bank (AfDB), the Development Bank of Southern Africa (DBSA), the Norwegian Trust Fund, the Islamic Development Bank and the OPEC Fund for International Development towards the construction of the Temane Transmission Project (TTP).
Mozambique’s potential to generate power is the greatest in all of Southern Africa, with access to vast potential in hydro, natural gas, wind, solar and coal resources. However, while investment for new generation exists, the country’s ability to transmit power from generators to consumers is severely limited. Because of these supply constraints, only 30% of the population have access to electricity and industrial growth has been hampered. With the CTT — Central Termica Temane (Temane Power Plant), a 400MW natural gas fired power plant, coming online in 2023, Mozambique must move now to build needed transmission infrastructure. The USD $542 million Temane Transmission Project is designed to evacuate power from the Temane Power Plant located in the northern part of Inhambane Province to Maputo, the nation’s capital of 1.2 million people located in the south of the country, to service households, businesses and industrial facilities.
Construction of the 400kV transmission line 560 kilometers in length will be completed by 2023. TTP is the first phase of the Mozambique Integrated Transmission Backbone System (STE) Project, with a line capacity of 900 MW.
The Temane Transmission Project reached a milestone in June and July of 2019 when all financiers committed to their respective funding contributions. The World Bank, the African Development Bank and the Government of Norway allocated a total amount of USD $357 million in grants and the Islamic Development Bank, OPEC Fund for International Development and the Development Bank of Southern Africa in total committed to USD$ 185.7 million in loans.
The is key to not only linking the 400MW gas power plant, but also to increasing opportunities for power trade among Southern African Power Pool (SAPP) countries. Despite the abundance of energy resources in the subregion, weak transmission systems remain a major constraint, which will be improved by TTP and other regional interconnectors. The transmission line between Maputo and Temane will also allow greater security and availability of electricity in Mozambique for various socio-economic projects, in addition to enabling new connections to customers.
To assist Mozambique in pursuing this massive undertaking, the USAID-funded and Power Africa-supported, Southern Africa Energy Program (SAEP) is supporting Mozambique’s national utility, EDM, in bringing the Temane Transmission Project to financial close by providing a full-time embedded advisor to deliver organizational and technical support through EDM’s TTP Project Management Office (PMO) over a 24 month period. SAEP has managed key activities in moving the project forward, including the establishment of the PMO, the review of key outputs from project consultants, and facilitation of engagements between the funders to finalize the Project Financing Plan.
Due to the complexity of the project, the procurement of an Owner’s Engineer — an independent consulting firm that plays a supporting role to the technical project management — was critical. The SAEP advisor assisted the procurement process with the evaluation of shortlisted companies, the correspondent bidding phase and final selection. On 2 May 2019, the World Bank approved the appointment of the Owner’s Engineer. The appointment was a critical step towards the Temane Transmission Project advancing closer to financial close, anticipated in June of 2020. The SAEP advisor is expected to continue through to the end of CY 2019 after which the team will reevaluate the need for continued support.
