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Africa Business In The News

Emerging Africa Infrastructure Fund, IFC sign loan deal for Mozambique power station

JOHANNESBURG, January 22 – The Emerging Africa Infrastructure Fund has signed a deal with the International Finance Corporation to provide a $21 million loan to one of Mozambique’s newest and strategically most important power stations, it said on Monday.

EAIF said other lenders to Central Termica de Ressano Garcia (CTRG) included Absa Bank, French development finance institution Proparco and Dutch development bank FMO. The club of lenders had disbursed debt facilities totalling $189 million, it added.

Completed and brought into operation in early 2015, the 175 MW plant at Ressano Garcia is located near Mozambique’s border with South Africa, about 70 miles from the capital Maputo. The facility is owned by CTRG and operated by Finnish power station builder and operator, Wärtsilä.

Mozambique’s integrated electricity utility Electricidade de Mozambique (EDM) owns 51 percent of CTRG while South African energy and chemicals group Sasol has a 49 percent stake.

“This is a very effective public/private partnership model where the developer has taken the up-front risk and brought Mozambique an asset essential to maintaining the country’s economic progress,” EAIF’s executive director Emilio Cattaneo said.

“In addition, Mozambique’s public finances will benefit from tax and concession fee income over the life of the power purchase agreement between CTRG and EDM.”

EAIF is managed by Investec Asset Management, one of the largest third-party investors in private equity, credit, public equity and sovereign debt across the African continent.

In addition to the CTRG gas-fired plant and the Mocuba solar facility in Mozambique, EAIF has in the past year also signed hydro, solar, oil and gas power station transactions in Uganda, Senegal and Mali, said head of EAIF at Investec, Nazmeera Moola.

“Our depth of expertise across sub-Saharan Africa, increasingly in renewable energy, and in cleaner thermal generation technologies, energy markets and regulation means we bring added confidence to investors and help strengthen economic development in many parts of the continent,” she said.

Mozambique is one of the world’s poorest countries, with at least half of its 24 million people estimated to live below the poverty line. It has however recently discovered large natural gas reserves, which when commercially exploited should help transform the economy.

– African News Agency (ANA)

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