Central Termica de Ressano Garcia

Project description

This summary covers a non-shareholder loan (including principal, interest, and swap close-out amount) from Absa Corporate and Investment Bank, a division of Absa Bank Limited of South Africa (acting through its Corporate and Investment Bank division), to Central Termica de Ressano Garcia S.A. in Mozambique. The lender has applied for a MIGA guarantee of up to $90 million for a period of up to 16 years against the risks of expropriation, war and civil disturbance, and breach of contract.

The project involves operation and maintenance of a newly constructed 175 megawatt natural gas-fired power plant at Ressano Garcia in Mozambique, which borders South Africa. It will be evacuating power into existing transmission infrastructure managed by Electricidade de Moçambique E.P., the integrated public power utility. Mozambique has substantial proven natural gas reserves, but less than three percent are currently being used.

Environmental Categorization

The project is a category B under MIGA’s Policy on Environmental and Social Sustainability. Click here to view the Environmental and Social Review Summary prepared by the International Finance Corporation for their loans to the project.

Development Impact

The project will contribute to increased diversity in the hydropower dominated electricity and provide an opportunity to monetize the country's own gas resources. As the country's first independent power producers with a long-term power purchase agreement, the project will have an important demonstration effect.

MIGA’s proposed support for this project is aligned with the World Bank Group’s Country Partnership Strategy for Mozambique, which calls for improved energy access under the pillar of competitiveness and employment. It is also aligned with MIGA’s strategic priorities of supporting investments into countries eligible for concessional financing from the International Development Association.