Project detail - CENTRAL TERMICA DE TEMANE

Who is our customer

The Borrower, a special purpose vehicle Central Termica de Temane (the “Project”) is a 450 MW combined cycle gas-fired power plant. The Project ownership consists of 85 percent by Mozambique Power Invest (“MPI”) and 15 percent by Sasol Africa Proprietary Limited (“Sasol Africa Limited”). MPI is owned 60.8 percent by Globeleq Africa Holdings Limited (“Globeleq”), 15.2 percent by EleQtra Limited (“EleQtra”) and 24 percent by Electricidade de Moçambique (EDM).

What is our funding objective?

FMO will provide long-term funding of up to USD 38.25 million that is not commercially available in Mozambique, for the construction and operation of the Project. FMO is providing a B-loan following IFC.

Why do we fund this investment?

The Project, together with the associated Temane Transmission Project, is expected to increase the supply of low-cost electricity in Mozambique which helps to meet the growing domestic demand. In addition, it supports the implementation of the country's ambitious electrification program, with important economy wide impacts. The Project also contributes to optimizing system power generation costs in Mozambique and will facilitate the addition of new renewable energy options in the medium- to long-term. At the regional level, the proposed investment will deepen the integration of the Southern African power market by increasing the supply of affordable and reliable energy. This can be deployed as either baseload or peaking power, and that will improve liquidity on the regional competitive market. Assessment against the transition criteria – (Please copy the link to full Disclosure Text and open it in a new tab: https://www.fmo.nl/contracted-central-termica-de-temane)

What is the Environmental and Social categorization rationale?

This is a Category A project in consideration of potentially significant and diverse environmental and social risks related to the project construction and operations. Key environmental and social considerations relate to (i) ensuring the contractors comply with the environmental and social management system and associated obligations and plans for construction including aspects related to occupational health and safety; (ii) contractor compliance with IFC Performance Standard 2: Labour and Working Conditions; (iii) air emissions, (iv) liquid effluent discharges, (v) community health safety and security, including emergency response for all project components; (vi) community health and safety impacts, (vii) operations are in accordance with good international industry practice (‘GIIP’), (viii) biodiversity, (ix) 10 barge deliveries over a 7-10 month period during construction, (x) population influx and (xi) limited involuntary resettlement. The Project will be located within the long-established gas field area, adjacent to Sasol’s central processing facilities. The impacts and risks of the plant during normal operations are unlikely to pose significant risk to the surrounding environment or communities. The project will be managed in accordance with IFC Performance Standards 1-6. With regards to PS7 (Indigenous Peoples) and PS8 (Cultural Heritage) no Indigenous Peoples have been identified within the project area of influence and no impacts to cultural resources have been identified to date. The project’s EPC contractor is required to develop a chance finds procedure if archaeological/ cultural resources are identified during construction or operations.