The Energy Africa Mozambique Compact was recently signed by the Belgium Development Cooperation, the governments of Mozambique, The Netherlands and Norway, DFID, GIZ, African Development Bank, USAID, Italian Cooperation and private stakeholders. What this compact entails and why Belgium participates in it are briefly highlighted here. 

The developmental role of access to energy
Access to energy affects all aspects of sustainable development – social, economic, and environmental; this pertains for instance to demographics, livelihoods, health, education or gender relations. Most people in Southern Africa rely on traditional energy sources such as wood or other biomass. Overall just 24 percent of Southern Africa’s population, and only five percent in rural areas, have access to electricity; this is far less than in Eastern or West Africa. The poorest people are most vulnerable to both energy poverty and climate change. It is against this background that the United Nations launched the Sustainable Energy for All initiative (SE4All) to provide modern energy to everybody by 2030. SE4All intersects with the United Nations Sustainable Development Goal for Energy (SDG7) and the 2015 Paris Agreement on Climate Change, where the global community commits to sustainable energy development.  

Daily household energy challenges in Mozambique
In Mozambique, only 27 percent of the population of 29.5 million has access to electricity, predominantly in urban areas. As much as 95 percent of the households use firewood or charcoal daily for cooking. The greenhouse gas emissions associated with the production and consumption of charcoal are high and projected to grow further. The main sources of non-electric light on the other hand are torches, firewood and kerosene. It is estimated that only 10 per cent of households have access to solar energy in the form of solar pico- or home systems.

The Mozambican government has endorsed the Sustainable Energy for All (SE4ALL) targets of Universal Energy Access by 2030. Projections show however that only 50 percent of the population can have access to the electricity grid by that year. There remains therefore a huge challenge and opportunity in addressing the remaining half through off-grid provisions. Mozambique has a total Renewable Potential of over 23,026 GW; and solar energy is the most abundant renewable resource with a potential of 23,000 GW. However, the solar off-grid household market is still mainly driven by donors and the Mozambican Energy Fund (FUNAE), an agency within the Ministry of Mineral resources and Energy (MIREME). Currently, the renewable energy industry is not well aligned with the public sector and other energy stakeholders in Mozambique. This should improve with the creation in 2017 of the ‘Mozambican Association of Renewable Energies’ (AMER). Barriers to the development of an off-grid household solar system market have been identified as follows: import duties and taxes on solar products; no certification or national quality standards for solar homes systems; need for innovative supply chain finance mechanisms; low institutional coordination among different actors; a need to adapt policies for the off-grid sector;  end-users’ low awareness and difficulties to pay; lack of skilled human resources (especially at decentralised level); and high logistics and market knowledge costs  (lack of research and studies).     

Donors commit to the coordinated promotion of household solar systems markets
In November 2017, under the Partnership Agreement between the governments of Mozambique and United Kingdom, the Energy Africa Mozambique Compact (‘Compact’) was published. The main strategic objective of the Compact is to develop a market for the new and renewable energy sector in Mozambique. Emphasis is put on an active supporting role of government, active private sector participation, and assistance of donors where relevant. The Compact sets out key actions for the further elaboration of such an approach, potential coordination initiatives, a first hint of prioritization and an implementation plan until mid-2019.

Ongoing interventions by the Belgian development cooperation in the renewable energy sector feature in the Compact as part of the potential coordinated support.  The Renewable Energy for Rural Development Phase 2 (RERD2) project with FUNAE aims to finance the construction of off-grid systems and demonstrate the most suitable management mode for (large) mini-grids. Digitalisation of pre-payment metering and monitoring systems is foreseen. The capacity building component is targeted at improving project management skills of FUNAE at central and provincial level. The project of Capacity Development of the Ministry of Mineral Resources and Energy (MIREME) and of the Conselho Nacional De Electricidade (CNELEC/ARENE) assists in creating enabling conditions for the new and renewable energy sector by strengthening the recently created Ministry MIREME and of the future regulator for the sector ARENE.  A specific effort goes into the strengthening of capacities of provincial directorates of MIREME to improve renewable energy sector planning, monitoring and supervision and of ARENE as an independent and capable regulator for the new and renewable electricity sub-sector.

Key actions where Belgium has committed in principle-support to in the Compact are the elaboration of an off-grid policy, awareness raising among relevant ministries and institutions, strengthen the institutional framework and coordination, establish dedicated credit lines for off-grid renewable energy, specify (voluntary) national and international quality standards, expand mobile money agents in rural areas, and develop tailored training programs for consumers and agents. Further elaboration of collaboration strategies will take place in the coming year. An important moment will be the next Steering Committee meeting of all present signatories – MIREME, DFID, FUNAE, GIZ, Belgium Development Cooperation, African Development Bank, USAID, Netherlands, Norway, Italian Cooperation, and private sector interest groups-, where the first steps of operationalizing such collaboration will be further defined.

For more information, please contact Mr. Evert Waeterloos at evert.waeterloos@btcctb.org