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Mozambique Embraces A $6 Billion Electricity ProjectSIDUAVA, Mozambique (AP) — Hermínio Guambe used to cut hair in a tiny barbershop with no electricity in his village outside Mozambique’s capital. The arrival of power changed everything. The 48-year-old now uses hair dryers. The village pharmacy stocks vital medicines requiring refrigeration. More jobs were created as trading and transport picked up. “These are the kinds of businesses that drive economies,” World Bank President Ajay Banga said in an interview with The Associated Press during a July visit to tour electrification projects and meet entrepreneurs like Guambe. “Electricity isn’t just light, it’s a chance.” Mozambique has won World Bank backing for the $6 billion Mphanda Nkuwa hydroelectric plant, southern Africa’s biggest such project in 50 years. Mozambique, one of the world’s poorest countries by per capita income, aims to connect all of its 33 million mostly rural citizens to electricity by 2030, largely through renewable energy from hydroelectric, solar and other sources. Challenge similar in much of sub-Saharan Africa The challenge is similar in much of sub-Saharan Africa, home to 85% of the global population living without power, according to the World Bank. Electricity access in Mozambique has nearly doubled from 31% in 2018 to 60% in 2024. The state-run energy supplier Electricidade de Moçambique, or EDM, says it connected 563,000 homes in 2024 and plans to reach 600,000 this year. “Mozambique has the resources, gas, hydro, solar, and it’s already the biggest supplier of excess power to southern Africa,” Banga said. His visit came with fanfare, and political undertones. President Daniel Chapo, who took office after a disputed 2024 election, raised his fist to cheering crowds. Located 60 kilometers (37 miles) downstream from the even larger Cahora Bassa hydroelectric dam along the Zambezi river, the Mphanda Nkuwa plant is expected to generate 1,500 megawatts when it begins operations in 2031. That will help a region facing a 10,000-megawatt deficit that keeps millions from accessing power. The World Bank is not financing the project outright. Global energy firm TotalEnergies, French utility Électricité de France and Mozambique’s Hidroeléctrica de Cahora Bassa will develop the plant. The World Bank is providing a mix of support including concessional funding for legal and environmental issues and transmission lines, partial risk guarantees and political risk insurance. Banga said this approach in Africa aims to move away from reliance on donors for high-impact projects. It coincided with a global shift in development funding. With the Trump administration dismantling the U.S. Agency for International Development, multilateral lenders like the World Bank are stepping in, often emphasizing private sector–led growth. “Many shareholders, even in Europe, are reducing their overseas development assistance budgets because they have to divert the money to defense and their own needs. This is the way it is,” Banga said. New dams are rising but Africa's waters are mostly untapped Mphanda Nkuwa could also help Mozambique earn critical foreign exchange through exports of electricity to neighbors like South Africa and Zimbabwe. It is among several large hydropower projects aiming to reshape Africa’s energy future. Ethiopia is preparing to inaugurate its $4 billion Grand Renaissance Dam, which will eventually generate over 5,000 megawatts, doubling the nation’s power output despite fierce opposition from Egypt. In Congo, the World Bank is backing the huge Inga 3 project that could also send electricity to South Africa, Nigeria and others. Yet hydropower — the world’s largest source of renewable electricity — remains mostly untapped in Africa, with the World Bank and the International Hydropower Association estimating around 90% of capacity is still unused. And building a mega-dam is only part of the challenge in Mozambique. “Our country is quite big, and it’s not so easy to go everywhere with the national grid,” said EDM chairman Joaquim Ou-Chim. “So it’s off-grid solutions, mainly driven by solar.” About 10% of electricity access in Mozambique comes from off-grid projects, and more are being rolled out. Concerns over the financial aspect Evaristo Cumbane, an energy consultant based in Maputo, said large projects like Cahora Bassa and Mphanda Nkuwa are important but stressed the need for smaller, local sources of energy. “We are talking about plenty of rivers, plenty of sunshine, plenty of wind, plenty of coastlines,” he said, adding that “the real Mozambique is in rural, remote areas.” Cumbane also urged caution over Mozambique’s growing debt burden. Public debt rose to about $17 billion in the first quarter of 2025. A record $2.1 billion was spent in 2023 in debt service, according to the Finance Ministry. “The World Bank is not a godfather, it is not god. The guy is here on business. These are not donations,” he said. It was not clear how much new debt is involved in the Mphanda Nkuwa hydroelectric project. Banga said the project’s final cost is yet to be determined but estimated $5 billion to $6 billion. Mozambique’s path has been complicated. Since gaining independence from Portugal in 1975, it has seen civil war, flare-ups of fighting following a peace deal and an ongoing Islamist insurgency in the north that forced TotalEnergies to halt a $20 billion gas project, though it hopes to restart operations. But for Mozambicans, Guambe’s buzzing barbershop is proof of what’s possible when power reaches the people. In another impoverished neighborhood outside Maputo visited by Banga, 38-year-old Aurélio Arlindo has been unemployed for years and lives without electricity. But new power poles signal hope. “It’s really coming. I am just waiting,” he said, and he hopes to open a cold drinks stall.

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08 September 2025

5 min read

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