AFRICAN DEVELOPMENT BANK SUPPORT FOR HCB MODERNISATION
London, 30 Nov (AIM) – The board of directors of the African Development Bank (ADB) Group has approved a loan of 125 million euros (about 129 million US dollars) to Hidroelectrica de Cahora Bassa (HCB), the company that operates the Cahora Bassa dam in the western Mozambican province of Tete.
According to an ADB press release, the loan will support the company’s Vital Capex programme aimed at modernising its electricity production system. The package comprises up to 100 million euros from the African Development Bank and up to 25 million euros from the Africa Growing Together Fund.
The release states that HCB is undergoing modernisation “to extend the life of the plant by at least 25 years, enhance the reliability of energy delivery, reduce outages, and enable the company to fulfil its contractual obligations to its off-takers and enhance regional integration of the electricity sector in SADC”.
It adds that modernisation will also ensure the sustainability of energy security in the region, particularly in South Africa, Mozambique, and Zimbabwe.
The vice president of the Bank’s Power, Energy, Climate Change, and Green Growth Complex, Kevin Kariuki, pointed out that “HCB’s increased capacity, enhanced reliability, and ability to provide ancillary services will facilitate greater integration of variable renewable energy sources such as solar PV and wind in the wider region”.
HCB is the largest Independent Power Producer (IPP) in Southern Africa, providing hydroelectric power to Mozambique and the Southern African Development Community (SADC).
On Sunday, Mozambican President Filipe Nyusi spoke at a ceremony marking the fifteenth anniversary of the Mozambican state taking control of HCB, when it took a majority holding in the company. In particular, he called for it to contribute to the acceleration of the government’s plan to provide Mozambicans with universal access to energy by the end of 2030. In addition, the President stressed that “we want an HCB that grows and positions itself strategically in a national and regional market that is increasingly competitive. It should be one of the main actors for the consolidation of the country’s intention of becoming a regional energy hub”.
The African Development Bank financed its first project in Mozambique in 1977 and since then has focussed on supporting projects covering agriculture, transport, water and sanitation, energy, communications, mining, and finance. Its total active investment in Mozambique stands at over a billion US dollars.