Mozambique: Launch of EU-supported programme PROLER

9 October 2020 | On 30 September, GET.invest Mozambique took part in the recent launch of the Programme for the Promotion of Renewable Energy Auctions (PROLER).

PROLER, developed by the Ministry of Mineral Resources and Energy (MIREME) with the support of the European Union, consists of structuring projects for public tenders in an auction system to award concessions for the production of electricity from renewable sources.

“With the launch of auctions under a public tender to award licenses for the production of renewable energy, MIREME intends to provide greater transparency and competitiveness in the sector, attracting potential national and international investors”, explains a recent press release.

 

 

The programme, implemented by the French Development Agency (AFD) in partnership with Electricidade de Moçambique (EDM), will allow leveraging private investment of approximately 200 million euros to implement four renewable energy projects through independent operators, with a total installed capacity of around 120 MW.

To facilitate the implementation of these projects, AFD provides EDM and the Mozambican authorities with technical assistance for preparing and launching calls for tender. This includes conducting feasibility studies and preliminary environmental and social studies. AFD also proposes a guarantee mechanism to private power producers with the aim of limiting the risk of non-payment by the buyer, national operator EDM.

As such, programmes like PROLER can ease access to finance by taking on part of the off-taker risk. Other challenges, like the complexity of integrating public financing support tools into the financial model of a private enterprise, require specialist expertise in financial modelling, a gap that services like the GET.invest Finance Catalyst can fill.

With the objective of contributing to the diversification of “quality and low-cost energy sources, ensuring a greater contribution from renewable energies in the energy transition and electrification throughout the country”, PROLER will play a key role in scaling up private sector participation and delivering reliable energy services in Mozambique.

Individual tenders will be launched for each of the four projects covered by the initiative. A call for Expressions of Interest is ongoing for a 40 MWp solar plant in Dondo and will close by 16 November 2020.  Two other calls are foreseen under the same programme for mid-2021 and 2023. More information is available here.