The argument by the Organisation for Economic Cooperation and Development (OECD) that tightening South Africa’s wealth tax regime would rebalance ... generational inequality has a fundamental flaw: it targets a “flighty” base, says an expert from the African Tax Institute.
Chikakuda has set a target for RESA to supply a cumulative 1 gigawatt of solar power to the region in the next 10 years or sooner. The company is “seriously looking” at entering South Africa and is open to projects across the region, he says.
RESA, which is incorporated in the UK, has its most advanced project at the Chimuara solar park project in central Mozambique. The project, which is being developed with BB Energy’s Solarcentury Africa and Mozambican investment company Checunda Investimentos, will provide a maximum capacity of 100MW. The electricity will be fed into the national utility Electricidade de Moçambique ‘s (EDM) grid from an existing substation.
Chikakuda hopes to conclude a power purchase agreement (PPA) with EDM around the end of the year. The project is being rolled out in phases, the first of which will have a capacity of 30MW. The cost of first-phase construction is about $40m, and RESA needs to raise about 70% of that, Chikakuda says. Depending on the performance of the first phase, the rollout of the remaining 70MW could be split into two phases.
According to the African Development Bank, only 40% of Mozambique’s population had energy access in 2021, 36% on grid and 4% off. The government is targeting universal energy access in the country by 2030, which will need at least 2,300 MW of new installed capacity and about 5 million new connections.
- Current national generation capacity comes from 79% from hydropower, while solar power accounts for just 1%. Mozambique has been seeking to increase that through a series of tenders for solar projects.
- Tenders are “likely to be the norm for the future” in Mozambique, and RESA wants to take part, Chikakuda says.
Import duties cut
The ADB says that to hit the 2030 target, 30% of the new connections will have to make use of solar home systems and mini grids. The government has been working to “create the right environment” for renewable power, Chikakuda says. Most duties on imported solar equipment have been removed, which is a “massive step forward,” he says. “Mozambique is ready for more renewable projects,” both on- and off-grid, he says.
The country’s coastal location allows different options to import solar equipment, he says. Logistics are eased by a good rail network, which RESA is considering using for its project. While work is needed to improve the country’s main north-south highway, which the government has said it will address, the overall road network is also strong, Chikakuda says.
Given Mozambique’s size, solutions need to be implemented off as well as on-grid, he says. “Relying on the grid alone won’t work in the short term.”
- The company, in partnership with Solarcentury Africa, is also developing the 50MW Nkhoma Deka solar project in Malawi, which will include a battery storage system.
- Chikakuda hopes to get ministerial approval to negotiate a PPA around the end of this, after which the project would take about 18 months to build.
Solar power needs to be a big part of the solution if Mozambique is to achieve universal energy access.
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