Mozambique Advances $4.5bn Mphanda Nkuwa Hydropower Project

The 1,500-megawatt run-of-river project on the Zambezi River is considered one of Southern Africa’s most significant energy infrastructure initiatives.

Mozambique has moved a step closer to securing financing for the $4.5 billion Mphanda Nkuwa Hydropower Project, following high-level talks with the African Development Bank (AfDB) aimed at unlocking private capital and reducing project risk.

A technical workshop held on 5 February 2026 at AfDB’s Country Office in Maputo brought together senior officials from the Ministry of Finance, Ministry of Mineral Resources and Energy, Electricidade de Moçambique (EDM), the Mphanda Nkuwa Implementation Office (GMNK), and the Bank.

The discussions focused on operationalising a Credit Enhancement facility to improve bankability and attract international investors.

De-Risking a Flagship Energy Project

The 1,500-megawatt run-of-river project on the Zambezi River is considered one of Southern Africa’s most significant energy infrastructure initiatives.

AfDB has acted as a strategic adviser throughout project preparation, supporting the development of a transparent procurement framework that resulted in the selection of a reputable investor consortium.

The project is now entering discussions on its financial security structure, with a Partial Risk Guarantee (PRG) expected to play a central role in reducing perceived investment risks.

Partial Risk Guarantee to Backstop Off-Taker Risk

The Government of Mozambique has requested AfDB support through a PRG facility to backstop liquidity obligations of EDM, the national utility.

This mechanism is designed to mitigate off-taker risk for international lenders — one of the key concerns in large-scale power projects in emerging markets.

In parallel, AfDB intends to mobilise concessional and grant funding for the regional transmission line that will evacuate power from Mphanda Nkuwa to industrial centres and facilitate electricity exports to neighbouring countries.

“This workshop marks the shift from advisory to execution,” said Rômulo Corrêa, AfDB Country Manager for Mozambique.

“Having worked with the Government to structure the transaction, we are now intending to de-risk Mphanda Nkuwa by utilising AfDB support.”

He added that under the Bank’s ADF-17 mandate to ‘Unlock Capital at Scale,’ the objective is to secure a financing framework that positions Mozambique as a regional energy leader.

A Future Energy Hub for Southern Africa

Once operational, the 1,500 MW hydropower plant is expected to:

• Expand universal energy access in Mozambique

• Supply competitively priced electricity to domestic industries

• Provide baseload power to the Southern African Power Pool (SAPP)

• Generate foreign exchange earnings through regional exports

The project aligns with Mozambique’s ambition to become an energy hub in Southern Africa while strengthening grid stability and industrial development.

Strategic International Consortium

Mphanda Nkuwa is being developed by a consortium comprising:

• EDF (France)

• TotalEnergies (France)

• Mozambique’s national utility EDM

• Hidroeléctrica de Cahora Bassa (HCB)

The structure reflects a public–private partnership model combining international expertise with domestic institutional participation.

With financial structuring now advancing, the project is entering a critical phase that could unlock one of the largest power investments in Mozambique’s history.