To serve a rapidly growing population, Mozambique’s significant energy resources can support government efforts to achieve universal access to electricity and clean cooking while charting a path to economic development, according to the International Energy Agency (IEA) first ever energy policy review of the country.

Today, most of Mozambique’s electricity generation comes from hydropower, while other renewable energy resources remain largely untapped.

The country aims to harness this significant potential to drive economic growth, industrialisation and clean energy exports.

This includes scaling up mining and processing to enable Mozambique to benefit from rising global demand for clean energy technologies and critical minerals.

The IEA’s Energy Policy Review of Mozambique was officially launched today alongside complementary IEA analysis, National Climate Resilience Assessment for Mozambique, during the 5th Energy Seminar of the Community of Portuguese Language Countries (CPLP) in Maputo.

 The Seminar is part of the CPLP Energy and Climate week, co-organised by the Lusophone Renewable Energy Association (ALER) and the Association of the Portuguese-Speaking Energy Regulators (RELOP).

IEA Deputy Executive Director Mary Burce Warlick launched both reports in the opening ceremony of the CPLP Seminar, which also included remarks from Marcelina Mataveia, National Energy Director at the Ministry of Mineral Resources and Energy of Mozambique.

Speaking by video message, Warlick said: “Mozambique is a country with tremendous energy potential. From vast natural gas reserves to abundant hydropower, solar and wind resources, the foundations are in place to build a modern, inclusive, and sustainable energy system. With the right partnerships, planning, and investment, Mozambique can turn its energy potential into lasting development gains.”

The IEA worked closely with the Ministry of Mineral Resources and Energy of Mozambique for the preparation of the Energy Policy Review, which benefitted from broad consultations with the key stakeholders across the energy sector, ranging from public bodies to development partners, private sector developers, academia, civil society and commercial banks.

The review takes stock of progress in expanding electricity access and encourages continued efforts to strengthen governance, coordination, and data quality for the government to achieve its energy and development goals.

Over the past decade, Mozambique nearly doubled its electrification rate thanks to grid extensions and off-grid solutions.

Yet, more than half of the population still lacked access to electricity in 2022, and access to clean cooking is critically low, with just 7 per cent of the population using modern solutions.

The report shows that mini-grids and standalone solar home systems will be key to enable least-cost electricity access in rural areas, but further efforts are needed to stimulate market development in these sectors, which remain dependant on public funding.

Through its Energy Transition Strategy (ETE), approved in 2023, Mozambique has set a long-term vision to achieve universal, affordable, and reliable access to modern energy by 2030.

It aims to leverage Mozambique abundant energy resources – including hydropower, solar, wind, biomass, and some of the world’s largest natural gas reserves – to build a modern and inclusive energy system, accelerate industrialisation and move up the value chain of critical minerals. 

However, implementation of the ETE faces constraints, including infrastructure and affordability challenges.  

Mozambique’s investment environment is hampered by a high cost of capital, restricting access to finance for projects and making it hard to close the country’s energy infrastructure gap.

While Mozambique is already exporting LNG, major projects have been delayed, and the anticipated benefits have yet to materialise.

The government has established a new Sovereign Wealth Fund to help manage the financial revenues generated from the country’s gas operations.

Moreover, Mozambique has developed a strong policy foundation for enhancing climate resilience and adaptation, including the National Climate Change Adaptation and Mitigation Strategy (NCCAMS) and the National Adaptation Plan (NAP).

The National Climate Resilience Assessment for Mozambique highlights that further benefits could be achieved by developing a comprehensive adaptation plan for the energy sector, conducting detailed analyses of climate impacts on hydropower, and promoting coordinated actions through collaborative frameworks and capacity-building programmes. -OGN/TradeArabia News Service