KfW invests US$21 million to promote renewable energy development in Mozambique, Investing.com reports

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KfW, with support from the European Union and the German Federal Ministry, has invested US$21 million in the Mozambican renewable energy sector through the GET FiT programme. The initiative aims to stimulate private sector investment in renewable energy infrastructure, focusing on private solar projects and small hydropower plants.

Marco Freitag, portfolio manager at KfW, highlighted the potential of hydropower to provide environmentally friendly energy and boost economic growth. The investment aims to attract independent power producers (IPPs) through electricity price subsidies, simplify their market access through standardized contracts and connect electricity from hydroelectric plants to the national grid in northern and central Mozambique, where energy poverty affects 80% s population.

The GET FiT program is expected to raise an additional €60 million ($63.2 million) in private capital. Mozambique currently has approximately 2,200 MW of hydroelectric power generation capacity. According to energy journalist Nicholas Nhede, an additional 25 megawatts of electricity are expected to be added under this move.

The program is divided into two phases: the first phase promotes solar projects and photovoltaic installations, with BMZ committing €25 million. Phase 2 supports small private hydropower projects at more than 1,400 potential sites with a total capacity of 18,000 MW. During this period, GET FiT Mozambique II allocated 20 million euros to support IPP market entry, provide electricity price subsidies for several years after commissioning, and provide a guaranteed basis to reduce financing risks.

The program uses a results-based funding approach and standardized contracting and approval processes to accelerate project implementation and award licenses through international public tenders. Mozambique currently generates 80% of its electricity from renewable sources and plans to increase hydropower capacity to 4,500 megawatts by 2030, based on environmental assessments. The plan aims to increase total power generation capacity by 25MW.

This article was created and translated with the help of artificial intelligence and reviewed by an editor. For more information, please see our terms and conditions.

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