Mozambique has a vast and diversified availability of energy resources on its territory, being the third-largest holder of natural gas and the largest hydropower producer on the continent. It exports a significant share of its produced power, and natural-gas rents alone account for 4.4% of Mozambique’s gross domestic product (GDP). Yet, the country has one of the lowest electrification rates in Africa, due to an underdeveloped power-distribution network, poor infrastructure, and regulatory barriers to the development of new power projects. The government has set the two-fold objective of reaching universal domestic electricity access and becoming a southern Africa energy powerhouse, and the role of renewables is deemed pivotal to achieve both goals.

  • 2030

    the target year to reach universal electricity access

  • 2040

    the year energy demand is expected to quadruple

  • 38 people per km2

    the population density

  • 1,290 dollars

    the GDP per capita in 2019

from fossil fuels to RES

Mozambique has a large domestic renewable energy generation potential: solar holds the greatest promise, followed by hydropower and wind. The energy endowment of the country also includes large fossil-fuel resources, as a result in recent years the energy mix has been diversified in favor of fossil fuels. However, renewables dominate power production through hydropower, while the share of solar is limited but expected to increase rapidly. The government identifies in its energy strategy the objective to develop RES technologies, promote public and private investments and reduce the damages caused by fossil fuels and the large use of traditional biomass. Despite this, no specific target for renewables has been adopted and instruments such as feed-in tariffs have been announced but not implemented.

  • 23 billion tonnes

    the endownment of coal

  • 70 MW

    the solar capacity under construction

  • 2,273 MW

    the installed RES capacity

from centralised to decentralised-generation

In Mozambique, the majority of the population lives widely dispersed across rural areas, which represents a major obstacle to grid expansion. In rural areas, domestic needs depend on expensive and unreliable diesel generators or traditional biomass and electricity access is below 8%. Despite a more significant focus on on-grid renewables, the government recognizes off-grid renewables-based solutions as key technologies for reaching remote areas, promoting rural development and fighting poverty. However, off-grid solutions are still underdeveloped and the participation of the private sector remains limited. The main obstacles are the lack of a definitive rural-electrification plan and the absence of a target for off-grid take-up in the 2030 universal access framework.

  • 31%

    the share of population with access to power in 2018

  • 500 million dollars

    the value of off-grid renewables projects launched by the government in 2017

  • 55%

    the ideal share of off-grid connections on total new connections in the next 20 years

from classical market to a novel business approach

The participation of the private sector in Mozambique’s energy market is still largely regulated by the Electricity Act adopted in 1997 and an update is long overdue. Despite this, almost all new generation plants are developed with private sector participation and power-purchase agreements. In 2017, an independent Energy Regulatory Authority (ARENE) was created to foster cost-reflective tariffs, promote free competition and act against abuses of dominant positions in the sector. However, significant barriers still prevent greater participation by the private sector in RES and off-grid solutions, including difficult access to capital and lack of standardizes PPAs. Moreover, the majority of private investments remain dependent on government interventions or donor-funded initiatives.

  • 2011 the year of the first law for public-private partnerships

  • 2017 the year of the establishment of an independent Energy Regulatory Authority

  • 1997 the year of the still dominant Electricity Act

from analogic to digitalised systems

In Mozambique, internet penetration is still low compared to neighboring countries and has not reached the critical mass to start reaping the benefits of network effects of ICTs, including in the energy sector. Mobile penetration and mobile money uptake are also lower compared to other countries in the region. The main barriers are the cost of entry-level internet-enabled devices, the lack of e-literacy programmes and a legal framework to protect electronic transactions. A very large urban-rural gap in internet penetration also represents a major obstacle for the diffusion of internet-based technologies for off-grid energy solutions targeting rural areas.

  • 18%

    the internet penetration in 2019

  • 4%

    the internet penetration in rural areas in 2019

  • 46%

    the mobile penetration in 2017

  • 22%

    the population with a mobile money account in 2017