The Board of Directors of the African Development Bank Group has approved a loan package not exceeding €125 million to Hidroeléctrica de Cahora Bassa (HCB) in Mozambique in support of its Vital Capex program aimed at modernizing the company’s electricity production system.
The package comprises up to €100 million from the African Development Bank and up to €25 million from the Africa Growing Together Fund.
Modernizing the system according to the bank will extend the life of the plant by at least 25 years and enhance the reliability of energy delivery.
Additionally, it will reduce outages and enable the company to fulfil its contractual obligations to its off-takers and enhance regional integration of the electricity sector in SADC.
It will further ensure the sustainability of energy security of the Community, particular South Africa, Mozambique and Zimbabwe.
“We are delighted to support the Vital Capex program, given HCB’s central role in the Southern African Power Pool. Additionally, HCB’s increased capacity, enhanced reliability, and ability to provide ancillary services will facilitate greater integration of variable renewable energy sources such as solar PV and wind in the wider region,” the Vice President of the African Development Bank’s Power, Energy, Climate Change and Green Growth Complex, Kevin Kariuki said.
The Bank’s Director for Energy Financial Solutions, Policy & Regulations, Wale Shonibare also indicated that move forms part of the company’s objective “Light Up and Power Africa” which is to integrate Africa’s electricity market.
“The Bank’s support to HCB is well aligned with its vision of integrating African electricity markets to promote the supply of affordable and reliable electricity to consumers in the region,” Wale Shonibare added.
