Mozambique's First Wind Energy Project Receives $54M Loan from AfDB

Mozambique is set to build its first 120 MW wind project with a $54M loan from the African Development Bank, marking a significant step in its renewable energy journey and contributing to job creation and CO2 emission reduction.

The African Development Bank (AfDB) has approved a $54 million loan to support the construction of Mozambique's first wind energy project, marking a historic move toward renewable energy in the country. This significant step bolsters Mozambique's aspirations to become a regional energy hub within the Southern African Power Pool (SAPP) and aligns with its broader sustainability goals.

Namaacha Wind Farm: Mozambique's Pioneering 120 MW Project

The approved funding will facilitate the development of a 120 MW wind power plant located in Namaacha, approximately 50 kilometers west of Maputo. Once completed, the project is expected to generate 331.6 GWh of electricity annually, helping diversify Mozambique’s energy mix, which has been predominantly dependent on hydropower and natural gas.

The initiative comes with considerable socioeconomic benefits, including job creation and gender inclusivity. During the construction phase, around 600 jobs will be generated, with 120 positions specifically for women and 300 opportunities for youth. The operational phase will sustain 20 permanent roles, maintaining a strong focus on gender and youth representation.

Power Purchase Agreement to Strengthen Energy Security

Under a 25-year power purchase agreement (PPA), Mozambique’s state utility, Electricidade de Moçambique (EDM), will purchase all the energy produced by the wind farm. The annual output will not only bolster the national grid but will also play a key role in reducing CO2 emissions by approximately 71,816 tons each year, contributing to global climate change mitigation efforts.

AfDB's Strategic Vision for Energy and Sustainability

Kevin Kariuki, AfDB’s Vice President for Power, Energy, Climate, and Green Growth, praised the wind project as a "milestone for Mozambique" that would enhance energy security and regional energy trade. Wale Shonibare, AfDB’s Director for Energy Financial Solutions, highlighted the wind project as a testament to the power of renewable energy in driving sustainable development and reinforcing Mozambique's economic resilience.

This project aligns with AfDB's broader strategic goals, including the Ten-Year Strategy, the New Deal on Energy for Africa, and the "High 5" initiative to "Light Up and Power Africa." Globeleq, one of the project's key developers, supports the wind farm as part of Mozambique’s "Energy for All by 2030" program, which aims for universal access to electricity within the next decade. Jonathan Hoffman, CEO of Globeleq, emphasized the project's contribution to sustainable growth and its potential to enhance energy access for the population.

Collaborative Financial Efforts for a Greener Future

In addition to AfDB’s contribution, the financial backing for the wind project includes support from the Sustainable Energy Fund for Africa (SEFA), the International Finance Corporation (IFC), the U.S. International Development Finance Corporation (DFC), the Emerging Africa and Asia Infrastructure Fund (EAAIF), and the Private Infrastructure Development Group's Technical Assistance facility. This collaboration underscores the global commitment to supporting renewable energy initiatives in developing regions.

Mozambique’s Path to Sustainable Energy

The Namaacha Wind Farm project is a critical part of Mozambique’s roadmap to sustainable energy and economic growth. By diversifying its energy portfolio and reinforcing its infrastructure, Mozambique is taking decisive action to secure a more resilient energy future, reduce environmental impact, and strengthen its position as a key energy player in southern Africa.