World Bank Funds Mozambican Expansion
The World Bank said January 22 it is providing about half the $189mn loans to refinance the 175 MW Ressano Garcia gas-fired power plant (CTRG) in southern Mozambique, which started generating in 2015.
Funding is to enable CTRG to fulfil its plan to more than double in size to 400 MW by the early 2020s, now that its gas supplier Sasol has expanded gas supply infrastructure and wells in the region.
The 175 MW plant, located 100km from Mozambique's capital Maputo and so close to the South African border, already covers 24% of Mozambique's power demand and consists of 18 Wartsila gas engines (banner photo above, courtesy of Sasol). The plan is to add some 225 MW of combined-cycle gas turbine (CCGT) generation capacity.
International Finance Corporation (IFC), the World Bank’s arm in charge of private sector investment, said it provided $55mn from its own funds, together with a syndicated loan of $42mn from the Emerging Africa Infrastructure Fund (EAIF) and Dutch state-owned FMO. The French state development agency Proparco, plus Barclays bank's South African subsidiary ABSA Bank as arranger, provided parallel loans. This brought total lending to a total of $189mn. Financial close for the refinancing was achieved on January 2, 2018, according to law firm Shearman and Sterling.
CTRG is Mozambique’s first gas-fired power plant to reach commercial operation and is 49%-owned by South African firm Sasol, a gas producer in southern Mozambique, and 51% by Mozambican state power utility EDM (Electricidade de Mocambique). Sasol supplies the plant with gas from its processing unit at Temane, in Inhambane province, while EDM purchases the power produced at a cost 40% lower than alternative power imports from South Africa.
EAIF is funded by the UK, Netherlands, Swiss and Swedish governments and by German state development lender KFW and its Dutch equivalent FMO, while private sector banks Standard Bank (South Africa) and Standard Chartered Bank (UK) are also commercial lenders to it, with Investec serving as its fund manager.