Nordic Business Breakfast 10th December 2014 ELECTRICIDADE DE MOÇAMBIQUE, E.P. 1 com energia construimos futuro Table of Content 1. Macro economic indicators 2. Electricity Sector Industry 3. Present and future challenges 4. Natural Energy Resources 5. Generation Expansion Plan 6. Conclusion ELECTRICIDADE DE MOÇAMBIQUE, E.P. 2 com energia construimos futuro MOZAMBIQUE o Population: 23.760 mil o GDP (Nominal): USD 15.355 billion o Per capita: USD 630 o GDP Growth Rate : 7.5% (2013) o Exchange Rate USD/MT: 30.50 ELECTRICIDADE DE MOÇAMBIQUE, E.P. 3 com energia construimos futuro MACRO-ECONOMIC INDICATORS INTERNATIONAL CONTEXT 2010 2011 2012 2013 World Economy GDP growth Rate (%) 5.3 3.8 3.3 3.0 • Euro Zone 1.9 2.0 -0.7 -0.4 • Asia (China e Índia) 9.5 7.8 6.7 6.5 • Sub-Saharan Africa 5.7 5.2 4.5 5.1 • Mozambique 7.1 7.3 7.3 7.5 World Inflation Rate (%) 3.7 4.8 4.0 3.8 • Euro Zone 1.6 2.7 2.5 1.5 • Sub-Saharan Africa 7.5 9.3 9.0 6.9 12.7 10.4 2.1 4.2 • Mozambique ELECTRICIDADE DE MOÇAMBIQUE, E.P. 4 com energia construimos futuro 10 MAIN FDI SOURCES IN 2013 ELECTRICIDADE DE MOÇAMBIQUE, E.P. 5 com energia construimos futuro Table of Content 1. Macro economic indicators 2. Electricity Sector Industry 3. Present and future challenges 4. Natural Energy Resources 5. Generation Expansion Plan 6. Conclusion ELECTRICIDADE DE MOÇAMBIQUE, E.P. 6 com energia construimos futuro Energy Outlook for Mozambique Electricity Supply Industry ELECTRICIDADE DE MOÇAMBIQUE, E.P. Electricidade de Moçambique (EDM): The national power utility wholly owned by the state responsible for the generation, transmission, distribution and commercialization of electricity throughout the country. Hidroeléctrica de Cahora Bassa (HCB): Owned by Moçambique Government (92,5%) and REN / Portugal (7,5%) is the Independent Power Producer (IPP) responsible for the generation of electricity in Cahora Bassa (2075 MW) Mozambique Transmission Company (MOTRACO): Independent Transmission Company (ITC), Owned 33.3% by EDM, 33.3% ESKOM and 33.3% SEB with the responsibility to supply electricity to MOZAL and wheel power to EDM and SEB of Swaziland 7 com energia construimos futuro Outlook Of Mozambique Power Sector electrification and coverage 1977 15 Districts Electrified 2008 2004 2006 2007 15 Districts Electrified 2009 2010 2014 121 Districts Electrified ELECTRICIDADE DE MOÇAMBIQUE, E.P. 8 com energia construimos futuro Outlook Of Mozambique Power Sector Access to electricity – on grid ELECTRICIDADE DE MOÇAMBIQUE, E.P. 9 com energia construimos futuro Outlook Of Mozambique Power Sector Customer base and new connection Moçambique is after South Africa the highest new connection rate per Year in SADC with an average of 140 000 new connection in the last 3 years ELECTRICIDADE DE MOÇAMBIQUE, E.P. 10 com energia construimos futuro Outlook Of Mozambique Power Sector Transmission National Grid Expansion Past Present 2020 1977 2014 Only 3 capital provinces All capital provinces connected connectedtotothe thenational national Grid Grid ELECTRICIDADE DE MOÇAMBIQUE, E.P. Future Novas centrais e linhas de transporte para responder a demanda 11 com energia construimos futuro Outlook Of Mozambique Power Sector Historic power balance Cahora Bassa contributes with 94% of the power balance ELECTRICIDADE DE MOÇAMBIQUE, E.P. 12 com energia construimos futuro Outlook Of Mozambique Power Sector National demand ELECTRICIDADE DE MOÇAMBIQUE, E.P. 13 com energia construimos futuro Outlook Of Mozambique Power Sector regional demand 90000 80000 70000 60000 50000 40000 30000 20000 10000 0 2013 2014 2015 2016 Peak Demand 2017 2018 Capacity Planned Planned Capacity will exceed peak demand by 2016. ELECTRICIDADE DE MOÇAMBIQUE, E.P. 14 com energia construimos futuro Table of Content 1. Macro economic indicators 2. Electricity Sector Industry 3. Present and future challenges 4. Natural Energy Resources 5. Generation Expansion Plan 6. Conclusion ELECTRICIDADE DE MOÇAMBIQUE, E.P. 15 com energia construimos futuro Outlook Of Mozambique Power Sector EDM Organisation ELECTRICIDADE DE MOÇAMBIQUE, E.P. 16 com energia construimos futuro Outlook Of Mozambique Power Sector The new paradigms…. Present & Future Before Government and Regulator Donnors and Financiers Clients / market • Extend the access to electricity to the population • Promote “cheap energy” for economic development • Institutional development and regulation of the electricty sector • Ensure medium and long term energy needs and access to natural resources • Finance de development of the electricity system in the Country • Funding predominant under Concessional Scheme • Regulated tariff system • Economic and Financial viability on the investment (PPP) • Cost reflective Tariff and or Cost recovery mechanism • Governance, transparency, • Access to basic energy services and low tariffs • Surplus capacity of infrastructure in transmission • Excess of energia • Availability / Service / Quality of Supply / Industrialization • Transmission Capacity on the Limit / constrains • Déficit of power and new generation plants ELECTRICIDADE DE MOÇAMBIQUE, E.P. ‹#› • Competitiveness of the energy sector in the Country • Promote private initiative • Operational management efficiency com energia construimos futuro Table of Content 1. Macro economic indicators 2. Electricity Sector Industry 3. Present and future challenges 4. Natural Energy Resources 5. Generation Expansion Plan 6. Conclusion ELECTRICIDADE DE MOÇAMBIQUE, E.P. 18 com energia construimos futuro The Mozambique natural resources and the least cost options Mozambique Natural Resources: Hydro ELECTRICIDADE DE MOÇAMBIQUE, E.P. 19 com energia construimos futuro Outlook Of Mozambique Power Sector Hydro natural resources • Mozambique is the second country in Southern Africa with the biggest hydro potential • The potential in Zambezi river is beyond 8 000 MW and only 2075 MW is in operation at Cahora Bassa South Bank • The total unexplored hydro potential in Mozambique is close to 12 000 MW out of which in Tete province ELECTRICIDADE DE MOÇAMBIQUE, E.P. 20 com energia construimos futuro Outlook Of Mozambique Power Sector Coal natural resources Mozambique Coal reserves are believed to be amongst the world’s largest , and a strong investment currently being made in the sector, particular in the Tete Province Moatize Coal basin poised to become the World’s newest major export coal basin 2 large scale projects already in mining activity (20 to 50 Mtpa) Additional large scale coal projects in exploration (Ncondezi, Jindal, Rio Tinto, Zambeze, Revuboe, etc..) Potential + 50 Mtpa of export coal by 2025 The coal proven reserves can produce more than 8 000 MW, base load power for 30 years ELECTRICIDADE DE MOÇAMBIQUE, E.P. 21 com energia construimos futuro Outlook Of Mozambique Power Sector gás natural resources The only gas fields currently in production in the country are located in Temane, in Inhambane province The gas is exported and transported by pipeline to South Africa by SASOL, a South Africa Company 27 MGJ are allocated for power generation > 100 MGJ is for export to South Africa Currently, EDM, SASOL, Investec, Aggreko, Gigawatt and MGC are developing generation power projects Around 350 MW will be Installed until 2016 in Ressano Garcia (Border with South Africa) ELECTRICIDADE DE MOÇAMBIQUE, E.P. 22 com energia construimos futuro Outlook Of Mozambique Power Sector Gás natural resources 2011 and the first months of 2012 saw the announcement of successive large finds of natural gas in Mozambique offshore. Such potential of natural gas identified is corresponding to 150 to 200 trillion cubit feet. The size of the natural gas finds in the Rovuma basin could turn Mozambique into Africa’s second large exporter of natural gas in 2019/20 Medium and large scale power generation plant could be installed in the north of Mozambique (> 2000 MW) Possibility of large scale development of a liquefied natural gas (LNG) project ELECTRICIDADE DE MOÇAMBIQUE, E.P. 23 com energia construimos futuro Table of Content 1. Macro economic indicators 2. Electricity Sector Industry 3. Present and future challenges 4. Natural Energy Resources 5. Generation Expansion Plan 6. Conclusion ELECTRICIDADE DE MOÇAMBIQUE, E.P. 24 com energia construimos futuro Outlook Of Mozambique Power Sector regulatory framework EDM created in 1977 with monopoly for GX, TX & DX (except for HCB) Law for Public Enterprise approved in 1991 (Lei Nº. 17/91) EDM transformed into a Public Enterprise in 1995 Electricity Act approved in 1997 (Lei Nº. 21/97) Electricity Regulation Decree approved in 2000 (Decreto 08/2000) Tariff System Decree 29/2003 EDM designated Manager of the National Transmission Grid and System Operator in 2005 (43/2005) Private Partnership Law for Infrastructure (Decree nº 15/2011) ELECTRICIDADE DE MOÇAMBIQUE, E.P. 25 com energia construimos futuro Outlook Of Mozambique Power Sector comparative advantages Natural Resources Proven Gas reserves Proven Coal Reserves Proven firm Hydro Renewable Reserves Financing Corporate balance Possible to refinance after COD Hydro Base No FSA Long Term PPA Thermo Base (Coal) Coal as a waste product from mining ELECTRICIDADE DE MOÇAMBIQUE, E.P. 26 com energia construimos futuro Generation Expansion Plan 2012 - 2020 Ncondezi (300 MW) Benga (300 MW) Palma (ENI) (75 MW) Lúrio (120 MW) Cahora Bassa Norte (1245MW) Alto-Malema (60 MW) Mphanda Nkuwa (1500 MW) Moatize (300 MW) Boroma (200 MW) Mavuzi 2 & 3 (60 MW) Lupata (600 MW) Massingir (25 MW) Temane (400 MW) Kuvaninga (40 MW) 2012 - 2014 CTRG (175 MW) Gigawatt (100 MW) ELECTROTEC (30 MW) Aggreko (222 MW) CTM (100 MW) ELECTRICIDADE DE MOÇAMBIQUE, E.P. 27 2015 - 2017 2018 - 2020 > 2020 com energia construimos futuro Power Balance and energy Mix ELECTRICIDADE DE MOÇAMBIQUE, E.P. 28 com energia construimos futuro Power Balance and energy Mix (Short and Medium term) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Carvão [MW] Gas [MW] Hidrica [MW] 2015 Hidrica [MW] Gas [MW] Carvão [MW] 2016 2017 2015 78% 22% 0% ELECTRICIDADE DE MOÇAMBIQUE, E.P. 2016 73% 27% 0% 2018 2017 62% 38% 0% 29 2019 2018 55% 38% 7% 2020 2019 37% 44% 19% 2020 37% 44% 19% com energia construimos futuro Power Balance and energy Mix (Medium and long term) ELECTRICIDADE DE MOÇAMBIQUE, E.P. 30 com energia construimos futuro Power Balance and energy Mix (Medium and long term) Until 2020 Gás will contribute with 42% of energy ELECTRICIDADE DE MOÇAMBIQUE, E.P. 31 com energia construimos futuro Road map of EDM equity financial participation Future corporate loans Corporate loan facilities secured on cashflows from realisation of cluster investments Future generation investment opportunities EDM Investments (EDMI) Future project rights and opportunities Potential concessionary finance Concessionary finance secured on basis that EDMI becomes a core business and vehicle for future economic and social development Future transmission investment opportunities Power trading Cluster dividends, project refinancing cashflows, selldown of stakes Hydro cluster ELECTRICIDADE DE MOÇAMBIQUE, E.P. Transmission cluster 32 Large scale thermal cluster Small scale generation cluster com energia construimos futuro Project development tracking matrix ESIA Development / Regulatory PROJECTS MoU JDA FWA SHA CA EPDA ESIA MOZAMBIQUE TRANSMISSION BACKBONE [STE] x x MPHANDA NKUWA [HMNK 1500 MW] x x x x CAHORA BASSA NORTH [CBN - 1245 MW) x x x x MASSINGIR [27 MW] x x ALTO MALEMA [60 MW] x x x BENGA [450 MW] x x x x x x MOATIZE [ 300 MW] x x x x x x NCONDEZI [300 MW] x x x x x NA NA NA x x CENTRAL TÉRMICA MAPUTO NA NA (CTM - 100 MW) x x x x x x x Feasibility Studies Aprovação GEOTÉCNI ENGENHARI ambiental CO A BASICA x NA x x x x x x x x MGTP (Temane - 400 MW) x x x BOROMA [200 MW] x x x x x x x NA NA NA STE NA NA NA x x x x x ELECTROTEC [ 80 MW] x x x AGGREKO [222 MW] x x x x x x x x x 2017 2021 2016 2021 x x x NA NA 2016 2020 x x x x x NA 2016 2019 x x x x x NA 2014 2018 x x x x x x 2016 2019 NA NA NA x x x x 2015 2018 x x x x x x x X October 2016 2018 2016 2021 2015 2017 NA 2015 2016 x x 2015 2017 X Operação x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x ELECTRICIDADE DE MOÇAMBIQUE, E.P. x 2020 2018 LUPATA [600 MW] x 2017 2015 x x Ano NA x x x NA x NA CSY x x x x x NA x NA X GIGAWATT [109 MW] Ano NA x x COD x x x Start Construction x Palma [ENI - 75 MW ] KUVANINGA [40 MW] ENGENHARI VIABILIDA MODELAGE PACOT ACORDO DE FECHO A EPC DE M FSA ToS PPA E FINANCIAMEN FINANCEIR DETALHADA ECONÓMIC FINANCEIRA FISCAL TO O x RESSANO GARCIA [CTRG - 175 MW] Legal and Financial Structuring x x x x x x x x 33 x x x x x x NA x x x STE x x x NA x x x x 2016 2021 x com energia construimos futuro x x x x 2014 2016 Table of Content 1. Macro economic indicators 2. Electricity Sector Industry 3. Present and future challenges 4. Natural Energy Resources 5. Generation Expansion Plan 6. Conclusion ELECTRICIDADE DE MOÇAMBIQUE, E.P. 34 com energia construimos futuro Outlook Of Mozambique Power Sector conclusions 1. The Electricity Sector will required more than 3 bUSD in the next 5 years to sustain energy demands 2. Concessional, Commercial and Private equity funding will be required 3. GoM will play a determinant role to Develop the ESI, including but not limited to project promotion 4. There is in place adequate regulatory framework and conducive for Independent Power Producers of electricity (IPPs) 5. Gás will be a Game changer on ESI and determinant for Gás to Power initiatives 6. EDM is going to a process of complex initiatives that needs special kills, competence and good Governance 7. Cost reflective tariffs will be fundamental to sustain the Investment required ELECTRICIDADE DE MOÇAMBIQUE, E.P. 35 com energia construimos futuro Thank You ELECTRICIDADE DE MOÇAMBIQUE, E.P. 36 com energia construimos futuro
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