The Emerging Africa Infrastructure Fund (EAIF) will participate in a large solar energy project in Mozambique through a US$16.9 million loan, according to a statement released on Wednesday.
The statement added that the loan, which has a repayment period of over 16 years, has been guaranteed by the International Finance Corporation (IFC) of the World Bank Group.
This solar energy project will be built by the Scatec Solar group, and the contract for the sale of electricity to state-owned Electricidade de Moçambique (EdM) was signed in November 2016.
The project, which is the first large solar power plant in Mozambique, will be located in the city of Mocuba, Zambezia province, and is expected to have an installed capacity of 40 megawatts, which allows the annual supply of 77,000 megawatt hours, or enough for 175,000 homes.
A shareholder agreement was also signed between KLP Norfund Investments AS (22.5%), Scatec Solar (52.5%) and Electricidade de Moçambique (25%), and the cost of this project is estimated at US$84 million.
The IFC will provide US$64 million (76%) to finance the project and the remainder will be guaranteed by the shareholders, and the share of Electricidade de Moçambique will be provided by the Government of Norway through a donation
EAIF, which operates under the umbrella of the Private Infrastructure Development Group, is currently funded by four governments – the United Kingdom, the Netherlands, Sweden and Switzerland, according to the institution’s website. (macauhub)