Globeleq on 10 December announced that Spain’s TSK has been selected to build the 450MW Temane combined cycle gas power plant. The award followed a competitive procurement process. Temane will use Siemens turbines, which TSK has used in similarly sized projects elsewhere.
At the same time, Globeleq announced that the United States’ International Development Finance Corporation (DFC) has agreed to provide $200m debt for the project, with the OPEC Fund for International Development (OFID) funding a further $50m. Temane is the third project OFID has co-financed in Africa which is sponsored by Globeleq.
The World Bank Group’s International Finance Corporation is expected to provide the balance of the debt financing and Globeleq said that the multilateral was finalising approvals. Financial close on the power project is expected by Q2 2021 with first power following in Q4 2023.
“Mozambique faces one of the lowest electrification rates in the world”, DFC executive vice president for strategy Edward Burrier said. “This project will reduce the cost of electricity, increase power generation, and address a critical development challenge for the people of Mozambique”.
The Temane project is central to plans to connect Mozambique’s disparate grid networks, anchoring construction of a 563km 400kV single-circuit transmission line between Maputo and Vilanculos. The line is being financed by the World Bank Group, the Norwegian Trust Fund, African Development Bank, Islamic Development Bank and OFID. A similar strategy is planned for the second part of the line which would connect to the 1.5GW Mphanda Nkuwa hydropower plant in Tete province.
“The Temane initiative is an absolute regional game-changer”, Globeleq chief executive Mike Scholey said. “It will ensure a reliable and affordable power supply – crucial elements for economic and social development.”
Temane will supply power to Electricidade de Moçambique (EdM) through a 25-year tolling agreement. Gas is being supplied from Sasol Petroleum Mozambique’s Pande-Temane Inhassoro fields. Globeleq is leading development of the project alongside EdM, Sasol Africa, and eleQtra.
Combined with the transmission line and upstream development, the entire project represents investment of more than $2bn.
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