KSA's ACWA to build $1bn power plant in Mozambique
The Moatize IPP is a 300MW coal fired project located in Tete Province
The Government of Mozambique and a consortium led by ACWA Power signed a 25 year Concession Contract for the development of the Moatize IPP Project, a 300 MW (first phase) coal fired power project located in Tete Province, 1,500 km north of Maputo the capital city of Mozambique.
ACWA Power, the lead developer, investor and operator of the project is joined by Vale, one of the largest mining companies in the world, and Mitsui Co Ltd. the global Japanese trading house, as co-Sponsors of the project. In addition, the Mozambican state owned utility, Electricity de Mozambique (EDM) and local investor Whatana Investment Group will enter as minority shareholders in the project.
Moatize IPP is a Green field Independent Power Project to be developed on a BOOT basis with a total investment coast of approximately US$ 1,000 million. It will be a Pulverised Fuel, subcritical Coal Fired Power Station with the Coal supplied by Vale MZ from the adjoining mine.
About 250 MW of the total capacity of 300 MW will feed the largest coal mine in the world that Vale MZ is developing at this site with the 0remaining 50 MW supplied to EDM, to feed the grid. The Sponsors have selected a reputable international contractor GS Engineering & Construction from Korea for the engineering, procurement and construction of the project and ACWA Power’s wholly owned subsidiary, NOMAC will be responsible for the operation and maintenance of the plant.
The project is expected to be the first large scale greenfield power project in the country to be financed using the Project Finance framework, Apart from satisfying the electricity needs of Vale, a major industrial user in Mozambique, the power plant when in operation will also contribute a significant amount of much needed capacity into the Mozambican grid.
Quite apart from thus supporting the economic development of the country by augmenting power generation capacity, the project will also inject significant socio economic value into this very underdeveloped and remote part of Mozambique by creating in excess of 2,800 jobs during the construction phase and approximately 160 permanent skilled jobs during the operational life of the plant. In addition, the sponsors of the project have also committed to a comprehensive community development programme including the training of approximately 1,000 local Mozambican’s, thus, contributing to the expansion of the valuable local skills pool in Mozambique.
“Signature on this Concession Agreement is a significant milestone for the Moatize IPP Project enabling us to complete the financing process and commence full scale construction. Moatize IPP will significantly enhance ACWA Power’s position as a rapidly expanding power developer in the Southern Cone of Africa, one of our target markets and also helps to diversify ACWA Power’s fuel experience beyond oil, gas and solar to now coal, all the while making a significant addition to the electricity generation capacity of Mozambique and contributing to the socio economic development of the country” said Paddy Padmanathan, President & CEO of ACWA Power.