Time to renew
• Chapter summary
Despite the delays brought about by COVID-19, 2020 is widely seen as the year of renewables for Mozambique. While the sector is still at a nascent stage, there is palpable excitement for its further regulation, structuring, and opening up to investors. The Business Year is thrilled to dedicate, for the first time in its coverage of Mozambique, a chapter to the green economy.
In 2018, the government launched the project Energia Para Todos (ProEnergia), which aims to extend universal energy access to the whole population by 2030. In early 2020, President Nyusi highlighted ProEnergia as one of the top priorities for his second term, and this has opened an enormous window of opportunity for private entities in the renewable energy sector. As the government and the public utility, Electricidade de Moçambique (EDM), pulled together to find new ways to fund this ambitious plan, the private sector mobilized to form the Mozambican Renewable Energy Association (AMER), with the mandate of engaging the government in a dialogue that could benefit all parties.
According to Emmet Costel, Secretary General of AMER, 2020 will be exciting for two main reasons. First, the public and private sectors are working hand-in-hand on the new Electricity Law to regulate the sector and liberalize the market, granting increased openness to private investments. Second, the sector has seen an unprecedented surge in attention from foreign donors, opening up funding for projects, especially in the on-grid and solar spaces. In this regard, in 2019 EDM launched the Promoção de Leilões para Energias Renováveis (PROLER) program, which will launch tenders for renewable energy projects. The off-grid space, including mini-grids and solar home systems, finds itself at a more nascent stage, but presents enormous potential.
In an interview with TBY, Antonio Saíde, Chairman of the National Energy Fund (FUNAE), the governmental body responsible for the implementation of the off-grid space, told us that 66% of Mozambicans do not have access to the grid, and solar home systems will play a key role in the ProEnergia plan. Despite the evident enthusiasm, one recurrent criticism that emerged was the opacity of relations between the public bodies EDM, the Ministry of Energy, and FUNAE, which in the past often stood in the way of progress. The private sector demands that transparency be a key priority in the upcoming regulations, a necessary precondition for opening to private investors.
Another key issue spearheaded by the private sector is the implementation of incentives and the abolition of tariffs for companies operating in the space. According to Luke Hodgkinson, Managing Director of Fenix International Mozambique, incentives are necessary to bring the price down for end-consumers and ensure that this industry can be truly inclusive. This is the only way the government can hope to achieve its ambitious plan for universal energy access. ✖