Nordic Business Breakfast
10th December 2014
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
1
com energia construimos futuro
Table of Content
1. Macro economic indicators
2. Electricity Sector Industry
3. Present and future challenges
4. Natural Energy Resources
5. Generation Expansion Plan
6. Conclusion
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
2
com energia construimos futuro
MOZAMBIQUE
o Population: 23.760 mil
o GDP (Nominal): USD
15.355 billion
o Per capita: USD 630
o GDP Growth Rate : 7.5%
(2013)
o Exchange Rate USD/MT:
30.50
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro
MACRO-ECONOMIC INDICATORS
INTERNATIONAL CONTEXT
2010
2011
2012
2013
World Economy GDP growth Rate (%)
5.3
3.8
3.3
3.0
• Euro Zone
1.9
2.0
-0.7
-0.4
• Asia (China e Índia)
9.5
7.8
6.7
6.5
• Sub-Saharan Africa
5.7
5.2
4.5
5.1
• Mozambique
7.1
7.3
7.3
7.5
World Inflation Rate (%)
3.7
4.8
4.0
3.8
• Euro Zone
1.6
2.7
2.5
1.5
• Sub-Saharan Africa
7.5
9.3
9.0
6.9
12.7
10.4
2.1
4.2
• Mozambique
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro
10 MAIN FDI SOURCES IN 2013
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro
Table of Content
1. Macro economic indicators
2. Electricity Sector Industry
3. Present and future challenges
4. Natural Energy Resources
5. Generation Expansion Plan
6. Conclusion
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro
Energy Outlook for Mozambique
Electricity Supply Industry
ELECTRICIDADE DE MOÇAMBIQUE, E.P.

Electricidade de Moçambique (EDM): The national
power utility wholly owned by the state responsible for
the generation, transmission, distribution and
commercialization of electricity throughout the
country.

Hidroeléctrica de Cahora Bassa (HCB): Owned by
Moçambique Government (92,5%) and REN /
Portugal (7,5%) is the Independent Power Producer
(IPP) responsible for the generation of electricity in
Cahora Bassa (2075 MW)

Mozambique Transmission Company (MOTRACO):
Independent Transmission Company (ITC), Owned
33.3% by EDM, 33.3% ESKOM and 33.3% SEB with
the responsibility to supply electricity to MOZAL and
wheel power to EDM and SEB of Swaziland
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com energia construimos futuro
Outlook Of Mozambique Power Sector
electrification and coverage
1977
15 Districts
Electrified
2008
2004
2006
2007
15 Districts
Electrified
2009
2010
2014
121 Districts
Electrified
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro
Outlook Of Mozambique Power Sector
Access to electricity – on grid
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro
Outlook Of Mozambique Power Sector
Customer base and new connection
Moçambique is after South Africa the highest new connection rate per Year in SADC
with an average of 140 000 new connection in the last 3 years
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro
Outlook Of Mozambique Power Sector
Transmission National Grid Expansion
Past
Present
2020
1977
2014
Only
3 capital
provinces
All capital
provinces
connected
connectedtotothe
thenational
national
Grid
Grid
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
Future
Novas centrais e linhas
de transporte para
responder a demanda
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com energia construimos futuro
Outlook Of Mozambique Power Sector
Historic power balance
Cahora Bassa contributes with 94% of the power balance
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
12
com energia construimos futuro
Outlook Of Mozambique Power Sector
National demand
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
13
com energia construimos futuro
Outlook Of Mozambique Power Sector
regional demand
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
2013
2014
2015
2016
Peak Demand
2017
2018
Capacity Planned
Planned Capacity will exceed peak demand by 2016.
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro
Table of Content
1. Macro economic indicators
2. Electricity Sector Industry
3. Present and future challenges
4. Natural Energy Resources
5. Generation Expansion Plan
6. Conclusion
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro
Outlook Of Mozambique Power Sector
EDM Organisation
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
16
com energia construimos futuro
Outlook Of Mozambique Power Sector
The new paradigms….
Present & Future
Before
Government
and Regulator
Donnors and
Financiers
Clients /
market
• Extend the access to electricity to the
population
• Promote “cheap energy” for
economic development
• Institutional development and
regulation of the electricty sector
• Ensure medium and long term energy
needs and access to natural resources
• Finance de development of the
electricity system in the Country
• Funding predominant under
Concessional Scheme
• Regulated tariff system
• Economic and Financial viability on the
investment (PPP)
• Cost reflective Tariff and or Cost recovery
mechanism
• Governance, transparency,
• Access to basic energy services and
low tariffs
• Surplus capacity of infrastructure in
transmission
• Excess of energia
• Availability / Service / Quality of Supply /
Industrialization
• Transmission Capacity on the Limit /
constrains
• Déficit of power and new generation plants
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
‹#›
• Competitiveness of the energy sector in the
Country
• Promote private initiative
• Operational management efficiency
com energia construimos futuro
Table of Content
1. Macro economic indicators
2. Electricity Sector Industry
3. Present and future challenges
4. Natural Energy Resources
5. Generation Expansion Plan
6. Conclusion
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro
The Mozambique natural resources and the least cost options
Mozambique Natural Resources: Hydro
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro
Outlook Of Mozambique Power Sector
Hydro natural resources
• Mozambique is the second country in
Southern Africa with the biggest
hydro potential
• The potential in Zambezi river is
beyond 8 000 MW and only 2075 MW
is in operation at Cahora Bassa South
Bank
• The total unexplored hydro potential
in Mozambique is close to 12 000
MW out of which in Tete province
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro
Outlook Of Mozambique Power Sector
Coal natural resources
 Mozambique Coal reserves are believed to
be amongst the world’s largest , and a
strong investment currently being made in
the sector, particular in the Tete Province
 Moatize Coal basin poised to become the
World’s newest major export coal basin
 2 large scale projects already in mining
activity (20 to 50 Mtpa)
 Additional large scale coal projects in
exploration (Ncondezi, Jindal, Rio Tinto,
Zambeze, Revuboe, etc..)
 Potential + 50 Mtpa of export coal by 2025
The coal proven reserves can produce more than 8 000 MW, base load power for 30 years
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
21
com energia construimos futuro
Outlook Of Mozambique Power Sector
gás natural resources

The only gas fields currently in production
in the country are located in Temane, in
Inhambane province

The gas is exported and transported by
pipeline to South Africa by SASOL, a South
Africa Company

27 MGJ are allocated for power generation

> 100 MGJ is for export to South Africa

Currently, EDM, SASOL, Investec, Aggreko,
Gigawatt and MGC are developing
generation power projects

Around 350 MW will be Installed until 2016
in Ressano Garcia (Border with South
Africa)
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro
Outlook Of Mozambique Power Sector
Gás natural resources
 2011 and the first months of 2012 saw the
announcement of successive large finds
of natural gas in Mozambique offshore.
 Such potential of natural gas identified is
corresponding to 150 to 200 trillion cubit
feet.
 The size of the natural gas finds in the
Rovuma basin could turn Mozambique
into Africa’s second large exporter of
natural gas in 2019/20
 Medium and large scale power generation
plant could be installed in the north of
Mozambique (> 2000 MW)
 Possibility of large scale development of a
liquefied natural gas (LNG) project
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
23
com energia construimos futuro
Table of Content
1. Macro economic indicators
2. Electricity Sector Industry
3. Present and future challenges
4. Natural Energy Resources
5. Generation Expansion Plan
6. Conclusion
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
24
com energia construimos futuro
Outlook Of Mozambique Power Sector
regulatory framework
 EDM created in 1977 with monopoly for GX, TX & DX (except for HCB)
 Law for Public Enterprise approved in 1991 (Lei Nº. 17/91)
 EDM transformed into a Public Enterprise in 1995
 Electricity Act approved in 1997 (Lei Nº. 21/97)
 Electricity Regulation Decree approved in 2000 (Decreto 08/2000)
 Tariff System Decree 29/2003
 EDM designated Manager of the National Transmission Grid and System
Operator in 2005 (43/2005)
 Private Partnership Law for Infrastructure (Decree nº 15/2011)
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro
Outlook Of Mozambique Power Sector
comparative advantages
 Natural Resources
 Proven Gas reserves
 Proven Coal Reserves
 Proven firm Hydro Renewable
Reserves
 Financing
 Corporate balance
 Possible to refinance after COD
 Hydro Base
 No FSA
 Long Term PPA
 Thermo Base (Coal)
 Coal as a waste product from
mining
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
26
com energia construimos futuro
Generation Expansion Plan 2012 - 2020
Ncondezi
(300 MW)
Benga
(300 MW)
Palma (ENI)
(75 MW)
Lúrio
(120 MW)
Cahora Bassa
Norte (1245MW)
Alto-Malema
(60 MW)
Mphanda
Nkuwa
(1500 MW)
Moatize
(300 MW)
Boroma
(200 MW)
Mavuzi 2 & 3
(60 MW)
Lupata
(600 MW)
Massingir
(25 MW)
Temane
(400 MW)
Kuvaninga
(40 MW)
2012 - 2014
CTRG
(175 MW)
Gigawatt
(100 MW)
ELECTROTEC
(30 MW)
Aggreko
(222 MW)
CTM
(100 MW)
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
27
2015 - 2017
2018 - 2020
> 2020
com energia construimos futuro
Power Balance and energy Mix
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro
Power Balance and energy Mix
(Short and Medium term)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Carvão [MW]
Gas [MW]
Hidrica [MW]
2015
Hidrica [MW]
Gas [MW]
Carvão [MW]
2016
2017
2015
78%
22%
0%
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
2016
73%
27%
0%
2018
2017
62%
38%
0%
29
2019
2018
55%
38%
7%
2020
2019
37%
44%
19%
2020
37%
44%
19%
com energia construimos futuro
Power Balance and energy Mix
(Medium and long term)
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
30
com energia construimos futuro
Power Balance and energy Mix
(Medium and long term)
Until 2020 Gás will
contribute with 42% of
energy
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
31
com energia construimos futuro
Road map of EDM equity financial
participation
Future
corporate loans
Corporate loan facilities secured on cashflows from
realisation of cluster investments
Future generation
investment
opportunities
EDM Investments
(EDMI)
Future project
rights and
opportunities
Potential
concessionary
finance
Concessionary
finance secured on
basis that EDMI
becomes a core
business and
vehicle for future
economic and social
development
Future
transmission
investment
opportunities
Power trading
Cluster dividends, project
refinancing cashflows,
selldown of stakes
Hydro cluster
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
Transmission
cluster
32
Large scale
thermal cluster
Small scale
generation
cluster
com energia construimos futuro
Project development tracking matrix
ESIA
Development / Regulatory
PROJECTS
MoU JDA FWA SHA
CA EPDA ESIA
MOZAMBIQUE
TRANSMISSION BACKBONE
[STE]
x
x
MPHANDA NKUWA [HMNK 1500 MW]
x
x
x
x
CAHORA BASSA NORTH [CBN
- 1245 MW)
x
x
x
x
MASSINGIR [27 MW]
x
x
ALTO MALEMA [60 MW]
x
x
x
BENGA [450 MW]
x
x
x
x
x
x
MOATIZE [ 300 MW]
x
x
x
x
x
x
NCONDEZI [300 MW]
x
x
x
x
x
NA
NA
NA
x
x
CENTRAL TÉRMICA MAPUTO
NA NA
(CTM - 100 MW)
x
x
x
x
x
x
x
Feasibility Studies
Aprovação GEOTÉCNI ENGENHARI
ambiental
CO
A BASICA
x
NA
x
x
x
x
x
x
x
x
MGTP (Temane - 400 MW)
x
x
x
BOROMA [200 MW]
x
x
x
x
x
x
x
NA
NA
NA
STE
NA
NA
NA
x
x
x
x
x
ELECTROTEC [ 80 MW]
x
x
x
AGGREKO [222 MW]
x
x
x
x
x
x
x
x
x
2017
2021
2016
2021
x
x
x
NA
NA
2016
2020
x
x
x
x
x
NA
2016
2019
x
x
x
x
x
NA
2014
2018
x
x
x
x
x
x
2016
2019
NA
NA
NA
x
x
x
x
2015
2018
x
x
x
x
x
x
x
X
October
2016
2018
2016
2021
2015
2017
NA
2015
2016
x
x
2015
2017
X
Operação
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x x x
x
x
x
ELECTRICIDADE
DE MOÇAMBIQUE,
E.P.
x
2020
2018
LUPATA [600 MW]
x
2017
2015
x
x
Ano
NA
x
x
x
NA
x
NA
CSY
x
x
x
x
x
NA
x
NA
X
GIGAWATT [109 MW]
Ano
NA
x
x
COD
x
x
x
Start
Construction
x
Palma [ENI - 75 MW ]
KUVANINGA [40 MW]
ENGENHARI
VIABILIDA MODELAGE
PACOT ACORDO DE FECHO
A
EPC
DE
M
FSA ToS PPA
E FINANCIAMEN FINANCEIR
DETALHADA
ECONÓMIC FINANCEIRA
FISCAL
TO
O
x
RESSANO GARCIA [CTRG - 175
MW]
Legal and Financial Structuring
x
x
x
x
x
x
x
x
33
x
x
x
x
x
x
NA
x
x
x
STE
x
x
x
NA
x
x
x
x
2016
2021
x
com
energia construimos
futuro
x
x
x
x
2014
2016
Table of Content
1. Macro economic indicators
2. Electricity Sector Industry
3. Present and future challenges
4. Natural Energy Resources
5. Generation Expansion Plan
6. Conclusion
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
34
com energia construimos futuro
Outlook Of Mozambique Power Sector
conclusions
1.
The Electricity Sector will required more than 3 bUSD in the next 5 years to
sustain energy demands
2.
Concessional, Commercial and Private equity funding will be required
3.
GoM will play a determinant role to Develop the ESI, including but not limited to
project promotion
4.
There is in place adequate regulatory framework and conducive for Independent
Power Producers of electricity (IPPs)
5.
Gás will be a Game changer on ESI and determinant for Gás to Power initiatives
6.
EDM is going to a process of complex initiatives that needs special kills,
competence and good Governance
7.
Cost reflective tariffs will be fundamental to sustain the Investment required
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
35
com energia construimos futuro
Thank You
ELECTRICIDADE DE MOÇAMBIQUE, E.P.
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com energia construimos futuro