Supporting the Policy Enabling Environment for Development

Support to Electricity Mozambique (EDM)

As the state owned electric utility, the financial and organizational health of EdM is paramount to improvements in the energy sector in Mozambique as a financially credible “off-taker” or buyer is required to purchase energy from IPPs under long term power purchase agreements (PPA).  If EdM is insolvent, IPPs will not be able to raise financing backed by PPAs without government guarantees.  For the short to mid-term, the government of Mozambique will be unable to issue financial guaranties.  

For this reason and many others, it is important to strengthen the finances of EdM.  Numerous donors are working to build the capacity and financial viability of EdM. Important progress has been made, including the passage of a new tariff law. The Swedish International Development Cooperation Agency (SIDA) has been working to help EdM in the rehabilitating power plants. The World Bank is preparing large investments in transmission capacity and, based on recommendations from the USAID-funded Sector Reform and Utility Commercialization project, reducing commercial loss through improved metering. SPEED+ will continue to coordinate with other donors through the Energy Sector Working Group to ensure USAID’s assistance is synergistic and not duplicative.  Specifically, USAID SPEED will work with EdM on: energy efficiency, the grid code and a possible adviser for the Temane transmission line.