BusinessCompaniesGigawatt Mozambique secures financing on 100 MW gas plant


Posted on Wednesday, 25 June 2014 07:21

Gigawatt Mozambique secures financing on 100 MW gas plant

File photo©ReutersPower company Gigawatt Mozambique has secured the financing to build a 100 megawatt (MW) gas-fired power plant in the African country, which should be in operation late next year, one of its advisers said.

The $200 million project located at the Ressano Garcia border with South Africa will inject much needed power into the rapidly expanding country, which currently has very limited plant capacity to produce electricity from natural gas.

...the power plant will be onstream in Q4 2015


Gas is seen as an attractive electricity source for Mozambique after major gas discoveries off its central coast.

Its Rovuma basin is estimated to hold more than 150 trillion cubic feet of gas, enough to supply Germany, Britain, France and Italy for 15 years.

"Construction will now commence on the project, with the intention being that the power plant will be onstream in Q4 2015," Eaglestone, an investment bank that advised the deal, said in a statement.

Eaglestone said equity was provided by a consortium of Mozambique shareholders, Gigajoule Power, Old Mutual Life Assurance Company and WBHO Construction.

Privately owned Gigawatt Mozambique already has a take-off agreement with the state-owned utility Electricidade de Mocambique (EDM) but it hopes to attract industrial clients, whose higher tariffs would make the project sustainable over the long term.

EDM needs to provide more than 760 MW but receives only 500 MW from the Cahora Bassa dam at a price of 1,080 meticais ($35) per MW, according to a World Bank report on the country.

The cost of purchasing electricity from other suppliers such as Aggreko and South Africa's Eskom is significantly higher at between 4,500-7,500 meticais, while EDM's average sale price is only 2,400 meticais. South Africa's Standard Bank was lead arranger and underwriter for debt financing.

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