Mozambique Energy for All, MDTF
Contribution ID : SE-0-SE-6-10477This website displays open data about Swedish aid, which shows when, to whom and for what purpose Swedish aid is paid out, as well as what results it has produced. This page contains information about one of the contributions financed with Swedish aid.
The implementation of the 'Programa Nacional de Energia para Todos' strategy was launched by Mozambique in November 2018, with the aim of mobilising support to achieve the very ambitious target of universal access to electricity by 2030. The programme is based on a new model of electrification, which rewards both the roll-out of the national electricity grid a...
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The implementation of the 'Programa Nacional de Energia para Todos' strategy was launched by Mozambique in November 2018, with the aim of mobilising support to achieve the very ambitious target of universal access to electricity by 2030. The programme is based on a new model of electrification, which rewards both the roll-out of the national electricity grid and the so-called off-grid electrification, and which clarifies the roles of the Ministry of Energy and Natural Resources (MIREME), the National Electricity Company (EDM) and the National Energy Fund (FUNAE). The World Bank intends to support the 'Programa Nacional de Energia para Todos' through a 'Mozambique Energy for All Project' project covering: (1) electrification via densification in the national electricity network, (2) electrification via off-grid operations for areas not covered by the national electricity network and (3) technical support to EDM as an electrification implementer via the national electricity network and to FUNAE as an off-grid electrification implementer, including the procurement of external implementation support. This Decision concerns the co-financing of the part of the World Bank project involving electrification via densification in the national electricity grid, with the aim of increasing access to reliable and sustainably produced electricity for households, businesses and public activities. The aim is to connect some 267 000 households, businesses, schools and health centres (about 1.3 million people) to the national electricity grid in all 10 provinces of Mozambique, thereby improving the livelihoods of poor people in rural and peri-urban areas. The Swedish support through the embassy is proposed to be administered by the World Bank in the form of a multilateral fund -Mozambique Energy For All Multi Donor Trust Fund (MDTF) amounting to SEK 150 million (approximately USD 17 million). Norway and the EU also intend to support the same part of the World Bank's project through the MDTF, where Norway has set aside USD 20 million and the EU is expected to contribute the equivalent of USD 30 million. The MDTF will offer all residents in the affected areas a direct connection to the electricity grid, as this approach maximises economies of scale in the connection process, minimises connection time and increases the ability of poorer customer groups to join, including women headed households. This means that no connection fee will be charged for those connected to the grid. Instead, a subsidized fee will be charged on an ongoing basis on the price of electricity. The amount of this fee has not yet been decided by Moçambique. The main expected outcomes of the proposed intervention are;1. Inclusive, efficient and adequate supply of electricity is in place for a total of approximately 267 000 households, businesses and public activities, of which 198 000 are in rural areas and 69 000 in peri-urban areas, including vulnerable groups such as female headed households.2. At least 50% of the new customer connections are made in the five poorest provinces of Mozambique - Niassa, Nampula, Zambezia, Cabo Delgado and Sofala.3. Co2 emissions are reduced by the corresponding approx. 200 000 tCO2e/year, by replacing fossil fuels with renewable energy sources (4.9 million tCO2e over 25 years).
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Result
For the Proenergia project, by October 2023, 410,991 new customers were connected to the grid, which represents around 164 percent of the targeted connections at project approval. The project has electrified 333 public or community facilities and 483 enterprises. Moreover, 5 resettlement sites have been electrified through the project (1 in Nampula, 2 Cabo Delgado, 1 in Sofala, and 1 in Maputo). Out of the 3,800 km of MV and LV lines targeted by the project, 4,332.25 km have been already built. The first phase of the YP Program has concluded with 10 young professionals trained on-the-job for more than two years, and with eight (out of 10) hired by EDM. Due to the success of the program in increasing capacity of the Project Implementation Unit (PIU) and EDM for implementation of electricity access project, Proenergia Plus is already implementing the second phase of the YP Program. The second phase of the YP Program hired 8 young professionals. The supervision consultant reported that the ongoing electrification activities in peri-urban and rural areas create direct and indirect employment opportunities for both local and international workers. While these jobs are temporary, it is a positive step towards income generation and skills transfer. As of October 2023 a total of 713 jobs were created of which 475 were local and 238 foreign. Proenergia Results to date: Component 1 On-grid Peri-urban and Rural Grid Electrification: A total of nine procurement processes have been launched in 2023 for a value of US$167 million. Most of the contracts for supply of materials are signed or under contract negotiations, and one of the lots for supply of poles was re-launched. Regarding delivery of materials, except meters which have already started to arrive to the country (75,000 meters are currently stored in ProEnergia Lot 1 and 4 warehouses). EDM has reached an agreement with most of the suppliers to delay delivery and avoid arrival of materials before mobilization of installation contractors. Materials will start arriving in January 2024. Contracts for supervision are already signed. 240,000 connections are expected under this component by the end of 2024. Component 2 EDM operational performance: Activities under Component 2 are expected to safeguard the financial performance of EDM as it increases its customer base through expansion of rural access to electricity. Activities supported include: Supply and installation of a new enterprise resource planning (ERP) with modules for an Enterprise Asset Management System (EAMS) and a Work Force Management System (WFM) is ongoing. Under the Energy Efficiency sub component, results from an expanded survey of public facilities to be included under the project for the replacement of lamps is delayed, but expected to be completed by the end of the year. The delay is due to lack of response of the selected facilities, and the subsequent need of in-person visits. EDM will share bidding documents to procure an EPC contractor to supply and replace the lamps in public buildings aiming to launch by December 2023. Component 3 Off-Grid electricity access and clean cooking solutions Households, small holder farmers, and small businesses: The sub-component finances a Grant Facility to incentivize the private sector to target remote and less attractive areas. Regarding the Facility Manager's procurement process, the RFP (Request for Proposals) began in December 2022. The bid evaluation report has been cleared by the World Bank in October 2023. Health and education facilities: A Working Group (WG) formed by Ministry of Education, Ministry of Health, and FUNAE has been established for coordination purposes under the project. The WG has defined the criteria to identify beneficiary health facilities and schools. The master list (mapping exercise to identify facilities lacking energy access) is continually updated by the WG members. To optimize procurement, a cost-efficient approach involving the clustering of schools around health centers is currently underway. Clean cooking: The development of the "National Clean Cook stove Strategy and Investment Prospectus 2021-2030 is ongoing. The RfP for the "National LPG Master Plan and 10-Year Horizon Investment Forecast was launched in October 2023. IDPs, resettlements and host communities: Delays in FUNAE's procurement processes have affected the implementation of the emergency response, and a reallocation of funds may occur in the next months. The window under the Off-Grid Finance Facility will continue to be developed. Component 4 Broadband Access for Underserved Areas and Target Groups Deployment of mobile broadband infrastructure and services across uncovered villages: The scope includes assessing network gaps and identifying priority areas/sites to be provided with enhanced connectivity, identifying appropriate incentive mechanisms to leverage private sector investment in expanding rural digital connectivity - while leveraging synergies with the energy sector, and providing technical assistance in the preparation of the associated legal and technical agreements related to rural connectivity tenders. It will also provide recommendations on public access point models to ensure sustainability. FUNAE is currently working on the proposal evaluation report. Broadband connectivity for public institutions: The request for proposals for the survey and demand assessment to identify energy and broadband needs in schools, hospitals and health centers is expected to be launched by mid-November. Component 5 Technical Assistance and Implementation Support MIREME: Regarding the Electrification planning and coordination unit, MIREME has appointed a coordinator, and started the hiring process to incorporate a Data Analyst, and Senior Electrification Officer. Through this component, the project also supports ARENE by procuring consultancy services required for the development of an Energy Demand Analysis and Forecast, and for the Implementation of Tariff Regulation. Both processes are in the EoI stage. ToRs for the Gender Assessment on the Energy Sector in Mozambique have been cleared. FUNAE: No procurements are currently being launched or are under preparation. EDM: The second phase of the Young Professional Program has incorporated six engineers, and two environmental and social specialists to the PIU. EDM launched in September the procurement to hire a communication agency to carry out local communication activities (along with a GRM component). Materials to be used in the local activities will be printed (after a process of improvement) by the firm hired under ProEnergia. In terms of digital communication, EDM prepared ToRs to hire an individual consultant that can support with the management of the website and social media already in place.
During the first phase of Proenergia, funds from Sweden were earmarked only for the grid connections but in Proenergia although in the PAD it is indicated that support from the MDTF will be for grid connections and technical assistance to the Ministry of Mineral and Energy (MIREME), this is only for programmatic reasons by the World Bank and Sweden will be involved in all components because of the links to other programmes supported by Sweden. The proenergia programme will be complimentary to other projects like the BRILHO, REACT, Beyond the Grid For Africa and the Modern Cooking Facility for Africa (MCFA) being supported by Sweden. The PAD has a broad discussion of sustainability with focus on government ownership, financial sustainability, operational sustainability, social sustainability as well as sustainability in service provision to public facilities. The WB note progress and demonstrated commitment from the GoM on its efforts to improve financial and operational sustainability, including commitment to implement the National Energy Strategy (through waiving and compensating EDM for connection fees), carry out institutional reforms in EDM and FUNAE and the ongoing implementation of the Financial Strengthening Plan. Failure of education and health institutions to pay for electricity services is considered as a remaining challenge to sustainability in service provision to public facilities. The programme will compensate for this by financing long-term contracts to operationalise and carry out regular maintenance. EDMs financial deficit was remarkably high in 2018 (more than 20%) due to capital expenditure for electrification investments funded by the Utility. The financial contribution of the Proenergia program is a relevant contribution to alleviate such a deficit. Improving financial viability of EDM will require a suit of measures by both EDM and GoM, including reducing losses, recapitalization of EDMs balance sheet and introducing cost-reflective tariffs. The Short-Term Financial Strengthening Plan aims for repayment of EDM arrears by 2025. Sida finds the financial situation and operational performance of EDM a key sustainability risk for the program. This risk is not only potentially undermining the sustainability of the programme but may have impacts on the entire sector value chain and affects the ability of EDM to expand energy services in line with the demands of Mozambiques growing population. Sida will continue to have dialogue with the WB to actively monitor and manage this risk. Promotion of productive use of electricity (PUE) leads to improvement of living conditions and income generation activities thereby increasing household ability to pay for electricity leading to improved EDM financial viability, PUE contributes to maximize development impacts, i.e. economic growth and poverty alleviation. The programme will include dedicated technical assistance under MIREME to review mechanisms that can enhance productive uses of electricity. The programme will also prioritise electrification of target areas based on potential demand from existing or planned agricultural loads to increase productivity. Sida assesses that this important focus of the programme needs to be strengthened further, by a broadened view to combine electricity with telecommunication and other infrastructure and active involvement of EDM, FUNAE and other relevant government institutions such as agriculture. Lessons learned from the promotion of productive use in other countries could also be useful.
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