Supporting the Policy Enabling Environment for Development

Off-Grid Support

Approximately 70% of Mozambique's population of 27 million do not have access to electricity. The Government of Mozambique and the Power Africa program intend to have 100% of these 19 million people connected by 2030; other organizations including the African Development Bank aim to achieve universal access by 2025. The cost per rural customer of connecting to the network is significantly higher than the cost of connecting urban customers. The social tariff and universal national tariff that EDM must use, even for the most remote rural customers, means that EDM loses money with each additional rural connection. EDM does not have the financial resources to connect all these people to the centrally managed network and, because of its current financial circumstances, can not afford to take on new customers at a loss. The needs of a significant portion of the currently unelectrified can be met more economically and more expeditiously with out-of-network solutions. Out-of-network solutions include solar power systems that are designed to serve only a home system and minigrids that serve communities. The law and the policy structure needed to encourage private initiative to invest in the off-grid sector have not yet been formulated; and over the next four years, we will build this structure through the following activities.

As a first step in the USAID SPEED project, we are supporting a review of the tax regime for renewable and energy efficiency equipment, based on the initial work of DfID.