subsector analysis solar business in mozambique · potential for diesel-pv hybrid systems is...

SUBSECTOR ANALYSIS

SOLAR BUSINESS IN MOZAMBIQUE

www.renewables-made-in-germany.com

Imprint

Author

Júlio F.M. de Castro, Energy Consultant

March 2014

Publisher

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

On behalf of the

German Federal Ministry for Economic Affairs and Energy (BMWi)

Contact

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

Email: [email protected]

Web: www.giz.de/projektentwicklungsprogramm

Web: www.renewables-made-in-germany.com

This subsector analysis is part of the Project Development Programme (PDP) Sub-Sahara Africa. PDP Sub-Sahara-Africa is implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Affairs and Energy (BMWi) under the “renewables – Made in Germany” initiative. More information about PDP and about renewable energy markets in Sub-Sahara Africa can be found on the website www.giz.de/projektentwicklungsprogramm.

This publication, including all its information, is protected by copyright. GIZ cannot be liable for any material or immaterial damages caused directly or indirectly by the use or disuse of parts. Any use that is not expressly permitted under copyright legislation requires the prior consent of GIZ.

All contents were created with the utmost care and in good faith. GIZ assumes no responsibility for the accuracy, timeliness, completeness or quality of the information provided.

http://www.giz.de/projektentwicklungsprogramm


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Content ............................................................................

List of Tables ..................................................................................................................................... ii

List of Figures ................................................................................................................................... ii

Currency ........................................................................................................................................... ii

Measurement .................................................................................................................................... ii

List of Acronyms .............................................................................................................................. iii

Executive Summary.......................................................................................................................... iv

1 The Context for Solar Energy ......................................................................................................1

1.1 Resource Endowment ............................................................................................................................ 1 1.2 Local Capacity ........................................................................................................................................ 1

1.2.1 Solar PV ......................................................................................................................................... 2 1.2.2 Solar Water Heating .................................................................................................................... 2

1.3 Electricity tariffs ..................................................................................................................................... 3

2 Major Market Segments ............................................................................................................. 4

2.1 Grid Connected Photovoltaic ................................................................................................................. 4 2.1.1 Photovoltaic for Residential Clients ............................................................................................ 4 2.1.2 Photovoltaic for Commercial and Industrial Clients ................................................................. 4 2.1.3 Photovoltaic under the Feed-In-Tariff .........................................................................................5

2.2 Off-Grid Photovoltaic ............................................................................................................................. 6 2.2.1 Pico-PV .......................................................................................................................................... 6 2.2.2 Solar Home Systems ...................................................................................................................... 7 2.2.3 Institutional systems .................................................................................................................... 8 2.2.4 Existing Diesel-Grids, Hybrid-Systems, Retrofitting and Green-Field Mini-Grids ............... 10 2.2.5 PV-Diesel-Hybrid Systems for Commercial and Industrial Clients ........................................ 11

2.3 Analysis of installed and potential market ......................................................................................... 12 2.3.1 PV systems .................................................................................................................................... 12 2.3.2 Solar water heating ..................................................................................................................... 12

2.4 Recommendations for German Photovoltaic companies .................................................................. 13 2.5 Recommendation for German Solar Water Heating companies ....................................................... 14

References........................................................................................................................................ 15

Annex I - Market participants .......................................................................................................... 17

I.1 Companies operating in the PV market .............................................................................................. 17 I.2 Solar Water Heating companies .......................................................................................................... 19 I.3 Local production of solar panels ......................................................................................................... 19

Annex II - Relevant Government Regulations and Institutions ....................................................... 20

II.1 Relevant government regulations ...................................................................................................... 20 II.1.1 The 2009 Energy Strategy ......................................................................................................... 20 II.1.2 The 2011 Strategy for New and Renewable Energy ................................................................ 20

II.2 Relevant government institutions ....................................................................................................... 23 II.2.1 Ministry of Energy ..................................................................................................................... 23 II.2.2 Conselho Nacional de Electricidade .......................................................................................... 23 II.2.3 Electricidade de Moçambique .................................................................................................... 23 II.2.4 Fundo Nacional de Energia ....................................................................................................... 24

Annex III – Electrified districts in Mozambique ............................................................................. 25

Annex IV – Diesel generator mini-grids .......................................................................................... 26

Annex V – List of Provincial PV Retail companies ........................................................................... 27


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Annex VI – List of other Companies and contacts ........................................................................... 28

List of Tables

Table 1: Global solar radiation averages for 6 locations in Mozambique ......................................................................... 1 Table 2: Electricity tariffs per category in Euro cents per kWh or kW (2013) .................................................................3 Table 3: Tariffs for large consumers ...................................................................................................................................3 Table 4: Feed-in-Tariff for solar energy ............................................................................................................................. 5 Table 5: Sales of PV systems ............................................................................................................................................... 7 Table 6: Importers and retailers of small PV systems ....................................................................................................... 7 Table 7: Analysis of the costs of PV installations .............................................................................................................. 8 Table 8: List of provincial PV retail companies ............................................................................................................... 27 Table 9: List of other companies and contacts ................................................................................................................ 28

List of Figures

Figure 1: Electrification map of Mozambique ................................................................................................................. 25 Figure 2: Map of diesel generators in Mozambique ....................................................................................................... 26

Currency

As of December 2013:

1 USD = 30 MZN

1 EUR = 40 MZN

1 EUR = 1.35 USD

Measurement

W Watt Wp Watt peak Wh Watt hour

kW Kilowatt kWp Kilowatt peak kWh Kilowatt hour

MW Megawatt MWp Megawatt peak MWh Megawatt hour

GW Gigawatt GWp Gigawatt peak GWh Gigawatt hour


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List of Acronyms

AMES-M Access to Modern Energy Services - Mozambique

BTC Belgium Technical Cooperation

CNELEC National Council for Electricity (Conselho Nacional de Electricidade)

DNEE National Directorate for Electrical Energy (Direcção Nacional de Energia Eléctrica)

DNER National Directorate of New and Renewable Energy (Direcção Nacional de Energias Novas e

Renováveis).

EUR Euro, €, European Currency

€ct Euro cents

EDM Mozambican Power Company (Electricidade de Moçambique E.P.)

ESKOM South African Power Company

FiT Feed-in Tariff

FUNAE National Energy Fund (Fundo Nacional de Energia)

GIZ German Development Cooperation (Deutsche Gesellschaft für Internationale Zusammenarbeit)

IED Innovation Énergie Développement

IIM Technical Institute of Maputo (Instituto Industrial de Maputo)

LED Light Emitting Diode

MoE Ministry of Energy (Ministério da Energia)

MZN New Mozambican Metical

NGO Non-Governmental Organisation

PV Photovoltaic

SHS Solar Home System

SOLTRAIN Southern African Solar Thermal Training and Demonstration Initiative

SWH Solar Water Heater

UEM University of Eduardo Mondlane (Universidade Eduardo Mondlane)

UNIDO United Nations Industrial Development Organisation

USD United States Dollar

VAT Value Added Tax


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Executive Summary

Mozambique is well endowed with solar resources with an average irradiation of 5.7 kWh/m2/day, yet the solar

market in Mozambique is still at an early stage of development.

The photovoltaic (PV) market although being at an early stage, offers an interesting picture. Based on scattered

data available from projects and some assumptions the installed PV capacity in Mozambique has been estimated at

2,250 kWp, the overwhelming majority being projects implemented by the National Energy Fund (FUNAE). Some

new donor programmes are also starting with FUNAE that will add close to 1 MWp in institutional buildings and for

social purposes. The PV market is clearly dominated by FUNAE, which works via public tenders some of which are

tied-aid projects.

The technical market potential for stand-alone, mostly pico-PV, is estimated to be 75 MWp. The technical market

potential for diesel-PV hybrid systems is estimated to be 4.6 MWp.

The market potential for grid-connected PV in Mozambique lies ahead at the moment and highly depends on the

implementation of the Feed-in-Tariffs for renewable energy approved by the Government in October 2014.

A recently opened 5 MWp PV panels production facility in Mozambique might result in import restrictions on PV

technology.

Currently, a couple of international companies are already operating in the PV market in the country.

As the electricity prices in Mozambique are very low, opportunities for PV are mostly in the market segment of

providing reliable stable power during the frequent power failures and the off-grid market segment. However, to

compete with uninterruptible power systems, the PV system must be able to substitute part of the load under

normal operation.

Another interesting market segment is the reduction of fuel consumption in diesel grids by adding PV. However,

these grids are the responsibility of and installed by FUNAE. As tied-aid tenders are rather common, the market

potential is limited.

Solar water heating is a virgin market with few installations throughout the country. Market opportunities will

materialise as soon as there are concrete projects and incentives to reach the Government’s target of 100,000 Solar

Water Heaters (SWHs) until 2025. Also targeted marketing towards hotels, especially in isolated areas, to install

solar water heaters will bear results.


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1 The Context for Solar Energy

1.1 Resource Endowment

The table below presents the global solar radiation averages taken for a period of 30 years measured in three

stations along the coast of Mozambique (Maputo, Beira and Pemba) and another three stations inland of the

country (Maniquenique, Chimoio and Lichinga) (Cuamba et al. 2006).

Table 1: Global solar radiation averages for 6 locations in Mozambique

Maputo Beira Pemba Maniquenique Chimoio Lichinga

Latitude 25o58’ 19o48’ 12o59’ 24o44’ 19o07’ 13o18’

Longitude 32o36’ 34o54’ 40o32’ 33o32’ 32o28’ 35o14’

Altitude (m) 79 39 75 58 1,352 729

Global solar radiation (kWh/m2/day)

January 6.9 6.6 5.9 7.4 6.7 5.1

February 6.6 6.3 5.3 7.0 6.5 5.1

March 5.8 5.9 5.8 6.3 6.2 4.8

April 4.9 5.5 5.9 5.4 5.5 5.0

May 4.1 4.7 5.5 4.5 4.9 5.0

June 3.8 4.2 5.1 4.1 4.5 4.4

July 3.8 4.4 5.2 4.3 4.7 4.8

August 4.5 5.0 6.0 5.0 5.3 5.3

September 5.0 5.7 6.8 5.7 5.9 6.0

October 5.7 6.4 7.3 6.5 6.2 6.1

November 6.0 6.7 7.3 6.8 6.6 5.8

December 6.8 6.6 6.7 7.5 6.1 5.2

Station averages 5.3 5.7 6.0 5.9 5.8 5.2

Country average1 5.7

Source: Author’s adaptation from Cuamba et al. 2006

Renewable Energy Atlas

The project of producing a Renewable Energy Atlas for the country started in 2012 and consists of mapping the

potential sites for the development of renewable energy projects. Measurement instruments were installed in 14

telecommunication towers to measure solar radiation and wind speed and direction. By December 2013, the Atlas

was ready and had been presented to the Council of Ministers for approval.

1.2 Local Capacity

A description of several companies operating in the solar market in Mozambique (both local and international)

along with their activities is given in Annex I.

1 Country’s average means an arithmetic average of the six stations considered.


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1.2.1 Solar PV

There are few qualified technicians and engineers for installation, maintenance and system sizing and design. The

ones that are there are to be found in a number of companies that install Photovoltaic (PV) systems in

Mozambique. In 2013 a programme of the National Energy Fund (“Fundo Nacional de Energia” - FUNAE)

supported by the Belgium Technical Cooperation (BTC) had to resort to installation companies from Malawi and

Zimbabwe to install PV systems in institutional buildings, as a local company had failed to deliver quality during a

try-out phase of PV systems installation. The United Nations Industrial Development Organisation (UNIDO) faced

a similar situation for the installation of a PV system.

With the support from the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH (German

Development Cooperation) the programme “Access to Modern Energy Services – Mozambique (AMES-M)”

installed a PV testing laboratory in 2012 at the Instituto Industrial de Maputo (IIM). IIM is an educational

institution that offers 3-year courses in several technical fields at the level of Bachelor of Science. The PV laboratory

is used to give IIM students the basic knowledge in PV technology. IIM is also planning to start short-term courses

on a Technical and Vocational Education Training level to train technicians on PV technology.

Also with support from AMES-M a solar testing laboratory was installed at the Faculty of Science of the Eduardo

Mondlane University (Universidade Eduardo Mondlane - UEM). It will be used to test solar lanterns, batteries and

PV modules and give training in maintenance of PV systems. The laboratory is awaiting international certification

accreditation.

The Pedagogical University in Mozambique has a Centre of Electronics and Renewable Energies. Short-term

courses (2 to 6 weeks) are offered in renewable energy technologies and sustainable use of energy.

In 2013, the Renewable Energy Academy (RENAC), a German consulting and education company, provided a

technical training concerning PV-diesel hybrid systems with funding from the German Federal Ministry for

Economic Affairs and Energy to Mozambican stakeholders.

1.2.2 Solar Water Heating

In the field of water heating installations, there are only few qualified personnel. There are no capacity building

programmes in universities, vocational training or specialised professional schools in place that can be tapped by

entrepreneurs and investors. However, under a technical assistance programme called Southern African Solar

Thermal Training and Demonstration Initiative (SOLTRAIN) a Centre of Excellence at the Faculty of Engineering

of the UEM and the development of a Solar Thermal Technology Platform are being planned.

There is one installer, Agro Alfa, who specialises in thermo-syphon systems. However, the energy division in this

company was closed down due to low demand. Another company active in the market is Tian Run Solar Energy

Company, though without permanent staff for installation. Some installers from abroad, mainly from the Republic

of South Africa, work in Mozambique and have already installed a number of SWHs in hotels and guesthouses. Two

Portuguese installers, Ambiente and Self Energy, are currently planning to enter the market.


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1.3 Electricity tariffs

In this chapter the electricity tariffs are given. They give an indication of the challenges that PV projects (and for

that matter solar water heating projects) face in grid-connected areas.

Table 2: Electricity tariffs per category in Euro cents per kWh or kW (2013)

Demand (kWh) Social tariff

(€ct/kWh)

Domestic tariff

(€ct/kWh)

Agricultural tariff

(€ct/kW)

Generic tariff

(€ct/kW)

From 0 to 100 0.02675 - - -

From 0 to 300 - 0.0625 0.067 0.7425

From 301 to 500 - 0.08825 0.09525 0.106

Above 500 - 0.09275 0.10425 0.116

Pre-payment 0.02675 0.0795 0.09275 0.1065 Source: EDM 2014, Author’s price calculation according to exchange rate of December 2013

The tariffs for large grid-connected users are as follows (in Euro cents, exchange rate of 2013) (EDM 2014):

Table 3: Tariffs for large consumers

Large grid-connected users Tariff (€ct/kWh)

Large Low-Voltage users 4.15

Medium-Voltage users 3.425

Agricultural Medium-Voltage users 3.1

High-Voltage users 3.075 Source: EDM 2014, Author’s price calculation according to exchange rate of December 2013

To these tariffs, a cost per installed kW and a fixed charge have to be added.

For industrial and domestic clients a Value Added Tax (VAT) tax of 17% is added. Very big projects do not pay VAT.

According to the data published in an interview conducted by the Mozambique News Agency in March 2014 with

the chairperson of EDM, Augusto de Sousa Fernando, the average tariff for all consumers is € 0.06/kWh (Club of

Mozambique 2014). EDM pays a much higher price: electricity from Cahora Bassa costs € 0.027/kWh and from the

gas-fired power plant from the company Aggreko € 0.248/kWh. The power coming from the South African power

company ESKOM is above that range. For the in 2017 planned to be on-line coal-fired power plant of Moatize, the

estimated cost will be € 0.075. The maximum power demand at the beginning f 2014 was 761 MW, but the

maximum power EDM gets from Cahora Bassa is 500 MW.


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2 Major Market Segments

An overview of the institutional set-up, the existing laws, policies and regulation is given in Annex II.

2.1 Grid Connected Photovoltaic

2.1.1 Photovoltaic for Residential Clients

Currently, there are no known PV installations for residential clients (e.g. one-family houses, apartment houses,

villas) in grid-connected areas, due to the low costs of electricity and the relatively reliable energy supply by the

national grid. Programmes from the government or international community for this market segment are not in

place.

Some medium and upper class citizens who have a higher purchasing power than the average citizen have back-up

generators. This is however not as common as in many other African cities. This is partly due to the fact that costs

of fuel are comparably high in Mozambique. A calculation with a small gasoline generator up to 4 - 5 kW, and an

average efficiency of 15%2 and the gasoline cost of 47.5 MZN/litre (€ 1.19/l) results in a generated electricity cost of

€ 0.89/kWh.

For essential loads it is possible to have an uninterruptible power supply system, with which a PV system cannot

compete in areas with more or less reliable power supply if the PV system is only used as backup. However, recently

a new market niche is emerging, where the PV system supplies the house even when there is grid power and

substitutes power from the grid, and provides back-up power when the grid fails. Even with the low price of the

substituted electricity the systems pay back quickly and are much cheaper on a life-cycle basis than a fuel driven

generator, besides not producing noise and exhaust gasses which in residential areas can cause problems. An

embassy in Maputo is planning to install such systems for its diplomatic personnel, and there is a market potential

in the residential sector in cities.

In case the Feed-in Tariff (FiT) legislation is approved, the attractiveness of installing such systems will increase

sharply.

2.1.2 Photovoltaic for Commercial and Industrial Clients

So far, there are no PV installations for large consumers in the country. Big mining companies operate mostly in the

province of Tete and are provided with power from the grid. Due to the possibility of power failures, the majority

has installed diesel backup generators as a temporary solution. As most of them are mining coal they have installed,

or are planning to install, large coal power plants and sell electricity to the regional market.

2 This efficiency is quite generous, because back-up generators often run at very low load. According to a specifications sheet

for Honda portable generators up to 6 kilowatts, the efficiency of conversion between fuel and electricity is between 13% and 18%, when running at their “rated load,” usually about 10% lower than their maximum load.


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2.1.3 Photovoltaic under the Feed-In-Tariff

In mid-2013, there was a draft of a FiT Law for Mozambique in circulation in energy-related circles of the country.

The proposed tariffs are technology specific and would potentially provide attractive incentives for grid-connected

projects in Mozambique. The tariffs based on interviews conducted by the author are as follows3:

Table 4: Feed-in-Tariff for solar energy

Capacity Tariff (€ct/kWh)

Capacity up to 10 kWp 33.25 €ct/kWh








Capacity up to 1 MWp 28.51 €ct/kWh










Source: Author’s adaptation based on interviews with EDM officials in January 2014

The FiT was presented to the Council of Ministers for approval in September 2013 and was supposed to come into

force in December 2013. According to information from the Ministry of Energy from February 2014, the FiT is

however still being discussed.

The proposed tariffs are likely to be reduced before approval. They are very high compared to the costs of

hydroelectricity in Mozambique, of which the country still has large unexplored potential, and the large availability

of coal and natural gas reserves.

EDM also has some thermal generation which can be substituted by PV. However, 99.5% of the electricity is

generated with natural gas produced in Mozambique. The installed thermal capacity is 156 MW, out of which only

81 MW is operational (for natural gas 85 MW is installed and 59 MW is operational). Therefore, large-scale diesel

electricity generation substitution by PV is most likely not an option, because EDM will opt for natural gas. This will

not change in the advent of the FiT concerning EDM, but the FiT could be a large incentive for private investors to

feed into the EDM grid.

3 Post-editorial note from November 2014: In October 2014 final FITs came in force and have been published by the government (http://www.portaldogoverno.gov.mz/Legisla/boletinRep/br-n-o-84-iii-serie-2014/BR_84_III_SERIE_2014.pdf)

http://www.portaldogoverno.gov.mz/Legisla/boletinRep/br-n-o-84-iii-serie-2014/BR_84_III_SERIE_2014.pdf


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2.2 Off-Grid Photovoltaic

2.2.1 Pico-PV

The pico-PV market (e.g. solar lanterns for communities in rural areas, solar kiosks for lantern charging) is slowly

growing in Mozambique. There are no systematic large quantity imports for Pico-PV systems, but they are sold in

rural towns in the country side for off-grid areas and as back-up in the rural cities, where power fails more

frequently than in Maputo.

FUNAE has not addressed this market even though there were plans for setting up a financial mechanism with a

number of financial institutions to provide credit for these systems. Further, FUNAE has distributed a number of

solar lanterns close to Maputo. This has however, not been followed-up by any other activities.

Solarkom is assembling and marketing FOSERA systems in the country and are one of the few companies which

keep stocks ready for sale, and comply with the Lighting Africa standards. SUNBOX products imported from China

are also available.

Pico-PV products that comply with the Lighting Africa’s standards are only rarely sold in Mozambique with some of

the companies operating from neighbouring countries. This applies amongst others to the different products of

Barefoot Power, D.light, Sunlight Solar, Schneider Electric or Philips Lighting4.

Cellular charging

Cellular phone charging has proven to be a big market incentive for pico-PV in Mozambique. The Kadambo

company has a partnership with VODACOM which is commercialising a small PV system from SUNBOX with one

Light Emitting Diode (LED) - lamp and phone charger through their outlets. However, the initial cost seems to still

be a barrier.

Due to the high cellular phone coverage in Mozambique, a pay-as-you-go system as it was introduced in Kenya (M-

KOPA Solar) could be a viable product. M-KOPA is a pre-paid PV system that can be charged via mobile. There is

an upfront payment and the rest of the cost of the system is paid in monthly instalments. The system only works if

the payment is made. Payment and money transfer systems already exist in Mozambique; the M-KOPA system is a

variant of that.

AMES-M

The multi donor programme Energising Development which is implemented by GIZ5 is operating in Mozambique

under the name “Acesso ao Serviço Moderno de Energia” or Access to Modern Energy Services (AMES-M). The

programme is trying to develop a market for PV systems in Mozambique, by encouraging local entrepreneurs to set-

up solar businesses, providing them with technical training, providing limited financing and mediating their access

to credit. Now that the network is gaining shape, AMES-M will start with a large-scale promotion and marketing

campaign in the provinces where the dealer network has been set-up (see chapter 2.2.2). AMES-M has published in

a local newspaper a call for companies to participate in this market development. With two responses by Solarkom

and Kadambo, the reaction to this has been rather weak.

4 www.barefootpower.com/; www.dlightdesign.com/; http://sunlightsolar.com/; www.schneider-electric.com/; www.lighting.philips.com

/main/application_areas/Solarlighting/index.wpd 5 Funded by German Federal Ministry for Economic Cooperation and Development (BMZ) and co-financed by the Directorate-General for

International Cooperation of the Dutch Ministry of Foreign Affairs (DGIS), the Norwegian Ministry of Foreign Affairs (MFA-NOR), Australian Agency for International Development (AusAID) and the British Department for International Development (DfID)


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2.2.2 Solar Home Systems

Due to the advent of LED lighting the difference between Solar Home Systems (SHS) and Pico-PV has become less

clear.

Outside the FUNAE programmes there are no significant sales of SHS in Mozambique. As described in Annex I, a

number of stores in small towns in the country offer complete systems for homes, but their uptake is limited due to

the high prices. These stores do not offer installation or warranties. There are no specific credit lines for PV systems

available, however there is a willingness by banks to provide credit if enough collateral is provided. The real market

for SHS is outside towns in areas that are currently not electrified. An increase in demand is expected due to

decreasing prices of SHS with LED lamps and the plug and play connections used.

The SHS installed by FUNAE are mostly linked with its institutional PV programmes in which the houses of

teachers, nurses, administrators, etc. are electrified. Very few programmes have targeted households and most

programmes failed due to insufficient management structures, lack of maintenance and abuse by users (the systems

were given for free, a monthly fee would be collected by a local management group).

As indicated above, the AMES-M programme is among other things providing technical assistance, limited

financing and training to entrepreneurs to disseminate small PV systems in several provinces in Mozambique.

The following tables show how the AMES-M PV market stimulation effort has been picking up. Awareness and

promotion campaigns were not yet initiated as a dealers’ network has not been in place but is expected to start soon

and increase sales.

Table 5: Sales of PV systems

Period Pico-PV SHS

First semester 2012 1,322 424

Second semester of 2012 2,776 462

First semester of 2013 3,803 541

Total 7,901 1,427

Source: Author’s calculation based on interviews

The number of identified and/or trained importers and retailers of these systems is shown below. The importers

but also the retailers are mostly based in the large towns.

.

Table 6: Importers and retailers of small PV systems

Province (City) Importers Retailers

Maputo (Maputo) 5 10

Gaza 0 6

Inhambane 0 8

Sofala (Beira e Muxungué) 2 2

Manica (Chimoio) 1 3

Total 8 29

Source: Author’s calculation based on interviews


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2.2.3 Institutional systems

State institutional systems comprise PV installation in schools, health centres, administration units, public lighting

and homes of state employees. These projects are almost all implemented by FUNAE with funds from several

donors under several specific programmes. A number of other programmes are implemented by donors with Non-

Governmental Organisations (NGOs).

FUNAE Implemented programmes

1. The Belgium Technical Cooperation Programme

The Belgium Technical Cooperation (BTC) programme is currently under implementation (until end 2016) and

plans to electrify the institutions in several provinces as shown in the table below.

Table 6: Social infrastructure to be electrified

Infrastructure Zambézia Sofala Manica Total

Schools 90 80 25 195

Health Centres 59 20 0 79

Administrative Unit 38 29 10 77

Homes (teachers, nurses) 145 106 23 274

Vaccine fridge 59 20 0 79

Total 391 255 58 704

Source: Author’s representation based on FUNEA 2011a and FUNAE 2011b

A supply tender was launched on 7 July 2011 and two companies (Spanish and Indian) were awarded contracts.

The costs of the offers in these tenders give an interesting indication for the prices practised in Mozambique,

especially in governmental tenders. The kits are specified by the tender and include lamps, fixtures, batteries,

inverters, controllers, and installation, etc.

Table 7: Analysis of the costs of PV installations

Item Wp per installation €/Wp

Kit 1 1,000 12.7

Kit 2 870 11.7

Kit 3 190 22.8

Kit 4 400 14.5

Kit 1 only PV system 1,000 7,4

Kit 2 only PV system 870 7.0



Source: Author’s adaptation based on FUNAE 2011b

The prices given are difficult to compare to the residential prices worldwide, because the world prices usually

include installation, but do not include internal wiring, fixtures and batteries. A closer look shows that the cost of

insurance and freight in Mozambique is twice as much as the world market price.

The total costs including installation reflects the difficulties of installing such systems in a country with difficult

access roads, large distances, low skilled labour force (on the other hand the few skilled people earn relatively high

wages), red tape by customs officials that cause delays and increase storage and insurance costs, etc. Another aspect

is that many private companies in Mozambique are not interested in running the risk of going into rural areas and


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trying to develop a market for a product6 (as opposed to telecommunication companies), many just wait for the

next state tender where they apparently can ask for high prices.

2. World Bank PV in Schools, Clinics and Villages

The Government of Mozambique has received funds under the so-called Energy Development and Access

Programme from the World Bank to supply and install 544 PV systems to schools (250), clinics (250) and public

lighting (44) in villages and electrify 30 villages with renewable energy, with a total cost of € 5.7 million. These

installations will be carried out in the Provinces of Cabo Delgado, Niassa, Manica and Inhambane. FUNAE has

contracted IT Power, in conjunction with a Portuguese NGO called TESE, to supply and supervise the installation,

commission and maintenance of PV systems. The installation process will take fifteen (15) months for each

province, followed by a maintenance and warranty period of twenty four (24) months. The project was initiated in

June 2013 and will last until June 2017.

3. Other FUNAE PV projects

Besides the above mentioned projects, FUNAE has along the years secured financing from many more donors.

These are however thousands of installations all over the country.

4. PV for powering fuel stations

Part of the FUNAE mandate is to provide liquid fuels in isolated parts of the country where the private sector finds

it unattractive to invest in fuel stations. Because they are located in areas far away from the electricity grid, FUNAE

installs PV-systems. According to information available at the FUNAE site, 6 stations were installed in Nampula, 3

in Sofala and 1 in Manica Provinces. These stations have an installed power of 8 kWp each (FUNAE 2011c).

5. PV Mobile Phone charging

A pilot project for the first mobile phone and solar lamps charging station of 200 Wp, was installed by FUNAE in

the locality of Mafavuca, Boane District, Maputo Province.

UNIDO PV programme

The UNIDO has provided technical expertise and financial support for the installation of PV systems for productive

uses and rural development. These included solar water pumps for irrigation and drinking water in five villages –

Bragança, Chicualacuala B, Madulo, Mepuzi and Ndombe – and to supply a local radio station at Cidade Eduardo

Mondlane and to supply water for a local abattoir in Mapai (UNIDO 2010).

According to the Terms of Reference (UNIDO 2010), the installed systems and capacities were:

Bragança: PV water pumping for drinking water for around 128 inhabitants, 1,280 Wp

Chicualacuala B: PV water pumping for drinking water for around 980 inhabitants, 1,280 Wp

Madulo: PV water pumping for drinking water for around 450 inhabitants, 1,280 Wp

Mepuzi: PV water pumping for drinking water for around 440 inhabitants, 1,440 Wp

Ndombe: PV water pumping for irrigation water, 640 Wp

Eduardo Mondlane Community Radio Station: diesel power substitution, 4,800 Wp

Mapai abattoir: water pumping for use in the slaughterhouse 1,280 Wp.

PHAESUN GmbH project

In August 2010, Phaesun started a €300,000, two-year rural electrification project in Mozambique, in order to

provide electricity to the people of Pessene, located around 50 km from the country’s capital, Maputo.

The project has already fitted a primary school and two accommodations for teachers with 15 solar lamps, installed

through small off-grid systems (Pico-PV systems) with up to 10 Wp. The company will now establish a trader

6 Even though there is probably not a “market” for installing school systems of 1 kWp. The remark is more generic and refers to

all PV systems.


10

network for the distribution of the pico-PV systems with its project partner Coseba7 in Mozambique, to train 10 to

15 traders in the province of Sofala. Its cooperation partner, SonnenPlus GmbH, will train 10 to 15 traders in

Maputo.

The project also plans to establish solar shops and kiosks, where systems can be purchased and solar lamps rented.

Half of the project’s investment is covered by Deutsche Investitions- und-Entwicklungsgesellschaft (DEG). Phaesun

finalized the project in January 2013 with the opening of the third Solar Shop that is based in the rural area of

Moamba, approximately one hour by car from Maputo8.

Moçitaly projects

Besides the 103.8 kWp for FUNAE projects, the company has found quite a large market with NGOs and religious

organisations, which also include some clinics (22.9 kWp) and a limited number of private clients (3.7 kWp) – see

Annex I.

2.2.4 Existing Diesel-Grids, Hybrid-Systems, Retrofitting and Green-Field Mini-Grids

FUNAE mini-grids with diesel generators

In the context of its rural electrification programme, FUNAE is responsible for the electrification of rural

communities where the main grid is not available.

There are 72 diesel-based mini-grids implemented by FUNAE which are managed by local “management

committees”. The consumption fees are collected by the committee (flat rate tariff – 8 hours/day service) but the

collection rate is low. Many mini-grids have stopped due to lack of funds for fuel, spare parts and maintenance

(Innovation Énergie Développement (IED) 2013).

A study financed by FUNAE lists the 72 locations with mini-grids powered by a diesel generator; they are shown in

Annex IV (FUNAE 2014).

These grids are potential candidates for retrofitting with PV. Retrofitting under a commercial model is however not

very likely, as the investment risks for the private sector is rather high. There is a high level of political involvement

and an established culture of non-payment. Government or donor money would therefore be required.

On the other hand there are some examples of private-led mini-grids implemented by AMES-M where the

willingness-to-pay is high and people pay higher tariffs than in the urban areas. The difference is mainly that the

service is reliable and there is no government involvement, which often creates expectations among the rural

population to provide services free-of-charge.

Construction of Three Photovoltaic Systems in the Niassa Province

There is a tied-aid project in the Niassa Province for three PV systems. The whole project is valued at USD 35

million from a loan of the Government of South Korea under the Economic Development Cooperation Fund in the

country and will be offered interest-free for 40 years, including a grace period of 15 years. The 400 to 500 kWp

systems are to be constructed in Mavago, Mecula, Muembe in the Niassa Province and have the capacity to generate

energy to benefit about 29,500 people through the electrification of 2,401 households, 10 primary and secondary

schools and three health centres. The construction project of three PV systems officially started with the signing

7 Coseba - Consulting, Banking and Administrative Services, Ltd. is mainly a financial security systems company. Their areas

of activities are sale, installation and maintenance of systems and security equipment, access control and surveillance (including iris recognition systems), production of identification cards and/or access cards.

8 www.phaesun.com


11

(October 2010) of a Memorandum of Understanding between FUNAE and the implementing company of the

project, Hyosung Corporation.

The energy generated at each installation will be directed to the infrastructure covered by the project through the

low-voltage transmission grids working 24 hours a day. The construction contract of the PV systems includes the

construction of low-voltage power distribution grids, training of national technical team, technical assistance and

maintenance of the plants during 12 months after provisional acceptance.

The 50-villages Project

In 2013 FUNAE has delivered 2 PV systems of 4 kW each in the provinces of Gaza and Inhambane in the south of

the country, under the terms of a rural electrification project funded by Portugal. These projects are part of the so-

called “Projecto 50 Vilas” (50-villages Project) in rural areas across the country, with the exception of Cabo Delgado

province.

The project also includes electrification of social facilities such as schools, health centres, administrative offices,

retail units and the homes of teachers, nurses and the general population.

2.2.5 PV-Diesel-Hybrid Systems for Commercial and Industrial Clients

Hotels

Most hotels in isolated locations use diesel-generators for power and some also for water heating. Hotels in isolated

locations often use their backup diesel generators due to frequent power failures of the main grid in these locations.

This is a potential market for PV but no information is available on which hotels use diesel sets and where they are

located.

Mobile Telecom Companies

There are three mobile phone companies in Mozambique, which have base transceiver stations9 (BTS) all over the

country. A large number of these stations are connected to the grid, especially those of MCEL, which offer coverage

mostly in cities and towns. VODACOM has a large number of these BTS already powered by PV systems and uses

deep cycle battery stations to provide backup power in its grid-connected BTS, which decreases the possible PV

market with this company. MOVITEL is an upcoming mobile provider, which is expanding quickly in the country-

side, mostly in off- grid areas. MOVITEL often starts by providing coverage only during a limited amount of hours

and closes for the night and installs BTS with a diesel generator. As the market picks up MOVITEL will probably

offer 24-hours service. In this case PV will be a viable and competitive energy solution.

9 BTS is a piece of equipment including a tower that facilitates wireless communication between user equipment and a

network.


12

2.3 Analysis of installed and potential market

2.3.1 PV systems

Installed

According to a study from Cuamba et Al. (2013), more than 1,2oo kWp of PV system capacity was installed by

FUNAE between 2000 and 2011. FUNAE claims that around 1,500,000 people benefit from the systems that have

been installed, a calculation that is based on the area coverage. Evaluations by different donors have however found

that some systems are not operating as planned.

Based on scattered data available from the projects shown above and some assumptions, the installed PV in

Mozambique is estimated to be 2,250 kWp, the majority being FUNAE implemented projects. The large difference

between this number and the one given above could be explained by the three Korean projects which have installed

power of between 400 to 500 kWp (they have been included in the estimate, even though they were not yet finalised

at the date of publication). A new World Bank project with FUNAE is planning to install an additional capacity of

840 kWp in schools, health centres, public administration, public lighting, water pumping and households.

Potential PV market

A market development is expected as soon as the FiT is approved and will highly depend on the design of the FiT.

A study released by IED in November 2013 used a number of criteria such as minimum population density and

distance to the national grid to calculate the population that eventually could be served by mini-grids, which

resulted in a number of 133,880 people.

The annual per capita consumption in Mozambique in 2011 was 143 kWh, a number that includes every use, also

the one in affluent cities as Maputo. Assuming a consumption of 50 kWh per person per year, this would mean that

a minimum of 6,694 MWh a year would have to be supplied. Assuming an average insulation of 5 kWh/m2/day this

would mean that the technical potential PV for mini-grids is around 4.6 MWp, already taking into account 20%

conversion losses from direct to alternate current (IED 2013).

2.3.2 Solar water heating

Apart from a very small number of installations the market is virtually untouched. There are very few companies

operating seriously in this market because demand is quite low due to the low electricity tariffs and there is no

awareness of the technology.

However, the situation might change when the Government publishes concrete initiatives and incentives for this

market, to achieve the country’s target for 2025 of installing 100,000 SWHs. There is also a potential market with

hotels, even those grid-connected, as the water heating bill is high, due to power demand changes and the large

volumes of hot water required. Moreover, most hotels have a centralised water heating system (at least for the

laundry), which simplifies installation of a SWH system.


13

2.4 Recommendations for German Photovoltaic companies

German companies should enter into partnerships with local companies that are already operating in the market to

put their products in the market or by joining those companies in tenders. German companies can also directly

enter into those tenders, but besides knowledge of Portuguese this also requires knowledge of the local market and

regulations.

Companies could also directly approach (publicity, flyers, etc.) some promising market segments such as the

homeowners or the PV market related to religious organisations which seems quite interesting. Also targeted

marketing towards hotels for SWH could bear results.

The low price of electricity is not an incentive, but there are opportunities in the market segment of providing

reliable stable power where power failures occur frequently. However, to compete with uninterruptible power

systems the PV system must be able to substitute part of the load under normal operation.

Selling back to the grid is still not an option but this might change very soon when the FiT law becomes a reality.

German PV companies must be ready to enter the market of backup grid-connected power, but selling back the

produced electricity instead of using it for own consumption as pointed in the last paragraph. Also when the FiT law

gets approved the large-scale PV market will be very attractive in the country. To explore this market is necessary to

find partners willing to invest.

Charging mobile phones is a market in rapid expansion due to the widespread mobile coverage. German companies

that can offer a system similar to the M-KOPA from Kenya could enter into a partnership with a mobile phone

provider. The most likely to contact is MOVITEL that has the largest mobile coverage in rural areas.

To address the potential market of substituting diesel in mini-grids by PV hybrid systems, companies should be

aware that these grids are installed and given to the community by FUNAE. Given the bureaucratic nature of

FUNAE this market is limited to companies mostly competing for tied-aid tenders.

Companies should forge partnerships and work with German bilateral and German implemented multilateral

programmes to be able to tap the possibilities offered by these programmes. This also applies to provide technical

skills in the curriculum of education institutions and of Technical Vocational Education Training.

German companies could explore the potential offered by the social and corporate responsibility policies of large

mining companies in Mozambique, such as VALE and RIO TINTO. These companies have social programmes in

their mining areas to mitigate the effects of their activity on the population. If approached with a concrete business

plan they might show interest in the introduction of pico-PV and SHS in their concession areas.

Most of the artisanal fisheries’ production is sold locally and almost not processed industrially, mostly because

there are no cooling facilities at the main fishing communities. Nampula, Zambézia, Sofala, Inhambane and the

Maputo Provinces register the highest volume of artisanal fisheries. This could be an opportunity to be explored by

German companies in the context of development programmes that promote private sector strengthening.

Hotels

There is a small market for PV in isolated off-grid or on-grid hotels for the installation of PV. A targeted market

approach via hotel organisations (see Annex VI) could bear results. The same applies for water heating, but here the

market has a good potential. A problem in hotels located in urban areas is the lack of space to put the collectors,

however, all hotels have substantial parking lots that could be covered with PV panels or SWH collectors, providing

the additional benefit of shadow. The lack of any financial incentives is still a problem and the Government has still

no concrete action plan to fulfil the 100,000 SWH by 2025, but this could be an opportunity for German companies

to link with bilateral programmes to fill this gap.


14

2.5 Recommendation for German Solar Water Heating companies

Solar Water Heating for Residential Clients

Due to the low prices of electricity solar water heating is not very popular in Mozambique. For residential

applications (e.g. one-family houses, apartment houses, villas), there are no building codes that promote energy

efficient measures and there are no programmes from the government or international community that could

provide business opportunities for the private sector.

As indicated Annex II there is a Government target of 100,000 solar water heaters to be installed until 2025, but no

financial incentives or programmes to achieve this have been planned. Also under the above-mentioned SOLTRAIN

programme an awareness and information campaign would start soon.

Agro Alfa installed 30 evacuated tube thermo-siphon systems in 2011 in households, with capacities of up to 240

litres each. The same company also installed 10 systems in 2012 with sizes of up to 240 litres.

Solar Water Heating for Commercial and Industrial Clients

For commercial and industrial clients (e.g. hotels, breweries), the same issues mentioned above apply. However,

there are several hotels that are outside the national grid, and these use diesel-generated electricity, Liquefied

Petroleum Gasses or biomass for water heating.

At the Quilalea Island resort a SOLARHART water heating systems was installed to replace an electric geyser that

was putting tremendous pressure on the limited capacity of the diesel generator used to power the hotel.

A hotel in Maputo (Indy Village) has installed a 5,000 litre a day solar water heating installation, which was

installed by Self Energy.


15

References

Club of Mozambique 2014: “Mozambican electricity tariffs “unsustainable”” published the 24th March 2014 on the

website from Club of Mozambique. Link:

http://www.clubofmozambique.com/solutions1/sectionnews.php?secao=mining&id=31917&tipo=one

Cuamba, B C; Chenene, M L; Mahumane, G; Quissico, D Z; Lovseth, J;’Keefe, P O 2006: “A solar energy resource

assessment in Mozambique”, Journal of Energy in Southern Africa, Vol 17 No 4, November 2006, pages 76 – 85

Cuamba, B C; Santos Cipriano, A dos; Henrique, R; Turatsinze, J 2013: “Investment Incentives for Renewable

Energy in Southern Africa: The case of Mozambique” published by the International Institute for Sustainable

Development. Link http://www.iisd.org/pdf/2013/investment_%20incentives_%20mozambique.pdf

EDM 2011: “2011 Annual Report”. Link:

http://www.edm.co.mz/index.php?option=com_docman&task=cat_view&gid=67&Itemid=68&lang=pt

EDM 2014: “Tarifarios de Energie Eléctrica, Categorias tarifárias: Social, Doméstica, Agrícola e Geral”. Link:

http://www.edm.co.mz/index.php?option=com_content&view=article&id=121&Itemid=83&lang=pt

FUNAE 2011a: “Procurement Management unit – UGEA: For electrification of Schools, Health Centers including

Administrative Posts on the basis of PV systems, Invitation to Tender N° 045/SE-SPV/FUNAE/UGEA/11”,

published on the 8th July 2011. Link: http://www.funae.co.mz/index.php?view=article&catid=38%3Aos-

concursos&id=175%3Aconvite-para-concurso-no-045se-

spvfunaeugea11&format=pdf&option=com_content&Itemid=37&lang=en

FUNAE 2011b: “Belgian Cooperation Funds more projects in 2012” published the 22nd December 2011. Link:

http://www.funae.co.mz/index.php?view=article&catid=43%3Anoticias&id=211%3Acooperacao-belga-financia-

mais-projectos&format=pdf&option=com_content&Itemid=41&lang=en

FUNAE 2011c: “Procurement Management unit – UGEA Public Tender N° 076/SPV-PAC/FUNAE/UGEA/11. For

Electrification of Petrol service stations in rural areas on the basis of Photovoltaic solar Systems”, published the 8th

July 2011. Link: http://www.funae.co.mz/index.php?view=article&catid=38%3Aos-concursos&id=174%3A-

concurso-publico-no-076spv-pacfunaeugea11&format=pdf&option=com_content&Itemid=37&lang=en

FUNAE 2014: Estudo Sobre o Mercado Nacional Sistemas Fotovoltaicos, Volume I

IED 2013: “Low Carbon Mini-grids: “Identifying the gaps; building the evidence base” - Volume 1 – Final Report

published in November 2013. Link: http://www.ied-sa.fr/en/documents-and-links/publications/finish/6-

publications-and-reports/18-low-carbon-mini-grids-identifying-the-gaps-dfid-ied-vol1.html

Ministério da Energia 2011: “Estratégia de Desenvolvimento de Energias Novas e Renováveis para o Período de

2011 – 2025”.

República de Moçambique 2009: “Estratégia do Secotr de Energia” Boletim da República, I Série, número 22,

Suplemento, Conselho de Ministros, Resolução 10/2009 de 4 de Junho. Link:

http://faolex.fao.org/docs/pdf/moz119871.pdf

República de Moçambique 2009: “Política de Desenvolvimento de Energias Novas e Renováveis” Boletim da

República, I Série, no 41, Conselho de Ministros, Resolução 62/2009 de 14 de Outubro. Link:

http://www.mozlei.org/files/node/1198/boletim_da_rep_blica_i_s_rie_n_mero_41_200_19035.pdf

UNIDO 2010: “Terms of Reference – Joint Programme on Environmental Mainstreaming and Adaptation to

Climate Change in Mozambique, UNIDO PROJECT NUMER: FM/MOZ/08/005” published in October 2010. Link:

http://www.clubofmozambique.com/solutions1/sectionnews.php?secao=mining&id=31917&tipo=one

http://www.iisd.org/pdf/2013/investment_%20incentives_%20mozambique.pdf

http://www.edm.co.mz/index.php?option=com_docman&task=cat_view&gid=67&Itemid=68&lang=pt

http://www.edm.co.mz/index.php?option=com_content&view=article&id=121&Itemid=83&lang=pt

http://www.funae.co.mz/index.php?view=article&catid=38%3Aos-concursos&id=175%3Aconvite-para-concurso-no-045se-spvfunaeugea11&format=pdf&option=com_content&Itemid=37&lang=en



http://www.funae.co.mz/index.php?view=article&catid=43%3Anoticias&id=211%3Acooperacao-belga-financia-mais-projectos&format=pdf&option=com_content&Itemid=41&lang=en

http://www.funae.co.mz/index.php?view=article&catid=43%3Anoticias&id=211%3Acooperacao-belga-financia-mais-projectos&format=pdf&option=com_content&Itemid=41&lang=en

http://www.funae.co.mz/index.php?view=article&catid=38%3Aos-concursos&id=174%3A-concurso-publico-no-076spv-pacfunaeugea11&format=pdf&option=com_content&Itemid=37&lang=en

http://www.funae.co.mz/index.php?view=article&catid=38%3Aos-concursos&id=174%3A-concurso-publico-no-076spv-pacfunaeugea11&format=pdf&option=com_content&Itemid=37&lang=en

http://www.ied-sa.fr/en/documents-and-links/publications/finish/6-publications-and-reports/18-low-carbon-mini-grids-identifying-the-gaps-dfid-ied-vol1.html

http://www.ied-sa.fr/en/documents-and-links/publications/finish/6-publications-and-reports/18-low-carbon-mini-grids-identifying-the-gaps-dfid-ied-vol1.html

http://faolex.fao.org/docs/pdf/moz119871.pdf

http://www.mozlei.org/files/node/1198/boletim_da_rep_blica_i_s_rie_n_mero_41_200_19035.pdf


16

http://www.unido.org/fileadmin/media/documents/pdf/Procurement/Notices/1010/15002954/ITB%201500295

4_pdf-APP-7-Terms%20of%20Reference.doc.PDF

http://www.unido.org/fileadmin/media/documents/pdf/Procurement/Notices/1010/15002954/ITB%2015002954_pdf-APP-7-Terms%20of%20Reference.doc.PDF

http://www.unido.org/fileadmin/media/documents/pdf/Procurement/Notices/1010/15002954/ITB%2015002954_pdf-APP-7-Terms%20of%20Reference.doc.PDF


17

Annex I - Market participants

I.1 Companies operating in the PV market

Most companies established in Mozambique that operate in the PV market are based in Maputo and have several

lines of business. Most of them import PV systems (often from China) together with other retail hardware, and

import it for own sale not to distribute to other retailers.

The PV market in Mozambique is currently a tender market and equipment is only imported after the tender has

been won. There are at present about 16 international companies registered as Accredited Engineering Consultants

with FUNAE, mainly companies that have their head offices in Brazil or Portugal and local subsidiaries in

Mozambique. There are also around 13 Accredited Contractors registered with FUNAE, some of which also belong

to the group of accredited engineering firms10. From most of these companies, the core business is not related to

trading energy products in general or PV products in particular.

There are a small number of companies selling PV products, but they usually do not have many products in stock,

as they import upon demand.

Regionally there are some merchants that import and commercialise PV products. Usually warranty or service is

not provided. A study lists 17 provincial companies11 (see Annex V).

Moçitaly

Moçitaly is a company registered in Mozambique since 2000 and since 2002 active in the PV market. They employ

25 technicians working with PV installation. Moçitaly does the design, procurement, installation, capacity building

and provides after-sales service of PV installations. They are the largest Mozambican company delivering PV

systems, having delivered thousands of PV installations with a total power of 140.5 kWp, of which 103.8 kWp for

FUNAE projects. Included in that number is also the largest PV system in the country, the 33.3 kWp system at the

Mueda Provincial Hospital. Other customers are private clients (3.7 kWp), NGOs and religious organisations, which

also include some clinics (22.9 kWp) and several ministries (10.1 kWp), including one installation of 3.1 kWp for the

Ministry of Energy.

SELF-Energy

SELF-Energy is a Portuguese company that has opened a subsidiary in Mozambique in 2009 together with the

construction company VISABEIRA (a Portugal-based international conglomerate with interests in

telecommunications, construction, industry, tourism, real estate, and service industries) and the Mozambican

ELECTROTEC (specialised in electrical installations, power lines and systems, etc. and part of the large holding

INTELEC). They have won tenders with FUNAE:

To install 200 SHS in the administrative units of Machubo (Marracuene district), Panjane and

Mapulanguene (Magude district) and Calanga (Manhiça district) all in Maputo Province.

The 50 villages project mentioned in Chapter 2.2.4.

The PV electrification of 6 fuel stations of 8 kWp each, 3 in Nampula and 3 in Sofala Provinces.

Angelique International Ltd.

Angelique is an Indian renewable energy company that has worked with FUNAE, on an $850,000 project through

which PV systems were installed at 50 schools and 50 health clinics in Mozambique. Recently (2013) they have won

a tender under the BTC programme mentioned in Chapter 2.2.3 to install 391 systems in schools, clinics, homes of

10 Contractors mean companies that are in the business of implementing/installing FUNAE projects. See: www.funae.co.mz 11 FUNAE 2014: Estudo Sobre o Mercado Nacional Sistemas Fotovoltaicos, Volume I, p. 45


18

staff, etc., in the Zambézia Province. They are also partner of FUNAE in the installation and operation of the PV

panels manufacturing facility mentioned below in this annex.

EDUINTER

EDUINTER is a Spanish company that also provides services to FUNAE in response to tenders:

Electrification of 25 Schools and 10 Administrative Posts in Manica Province.

Under the BTC programme mentioned in Chapter 2.2.3 the company won the tender to install 313 systems

in schools, clinics, homes of staff, etc., in Manica and Sofala Provinces.

Martifer Solar

Martifer Solar is based in Portugal, had until recently an office in Maputo, but not any longer. They installed an 8

kWp PV system at a FUNAE fuel station in Manica Province.

Solarkom – FOSERA

Solarkom is a small company operating in the Mozambican market for the past two years. It was set-up as a

partnership between the UEM of Maputo and the University of Ulm in Germany and the German enterprise

FOSERA. Solarkom is a distributing company. Solarkom intends to penetrate the market through the establishment

of a distributer-dealer network, however without much success to date, and has also tendered for a FUNAE

contract. The company's distribution activities are in the provinces of Maputo and Gaza in cooperation with the

company EREL (Empresa de Energias Renovaveis do Limpopo Lda).

FOSERA Mozambique imports the PV components from Asia and from the German company FOSERA, and

assembles the kits in Mozambique. Their products are modular and plug-and-play and their smallest system is 0.5

Wp with a small LED-light and phone charger. The top product at the moment is a 5 Wp panel connected to a box

with an integrated Li-ion battery and controller, that can charge two phones and power 3 LED lights, which is

meant for small shops for lighting and to charge phones.

The German company SonnenPlus GmbH from Ulm (http://www.sonnenplus.com/) is in the course of setting up a

delivery chain and seeks to cooperate with local partners.

KADAMBO

The company is a Mozambican family business that has sold PV systems since 2011. The company sells all over the

country, but does not maintain a retailers’ distribution network, even though there are attempts to set one up. The

PV systems traded most in the pico-PV category are from SUNBOX which operates in Angola, Mozambique, Malawi

and Tanzania (www.sunboxworld.com).

The company offers a range of small solar home systems, mostly kits with 2 lamps, panel and battery, but have

difficulties marketing their products. Basically they are selling their products through large supermarket companies

that operate in most cities in Mozambique, but only have outlets in the cities, like the South African SHOPRITE.

They also have a partnership with a mobile phone provider, VODACOM, which is selling a small 5 Wp system with

one LED-lamp and a USB plug for phone charging. But, the products are sold in limited quantities, both because

the initial cost is still a barrier for the people who really need them and they are mostly marketed in cities where

there is electricity.

PHAESUN

Phaesun GmbH, has started several projects in Mozambique in cooperation with local partners.

EREL, Lda.

The “Empresa de Energias Renováveis do Limpopo, Limitada - EREL, Lda” is a consulting company established in

2005 in Maputo. EREL, Lda focuses its activities in a number of areas, including consultancy and technical


19

assistance in issues related to energy, environment, climate, science and technology and education; integration and

assembly of components of renewable energy systems and rural electrification.

I.2 Solar Water Heating companies

There are few established companies regularly selling or installing SWHs in Mozambique, with the exceptions of

AGRO ALFA, but according to recent information this company is almost not installing any systems, since it

stopped its energy division, even though it still is in principle active in the market.

The Portuguese company Self Energy (see above in this annex) installed a large (5,000 l/day) SWH system in Hotel

Indy Village in Maputo. Some shops import SWH equipment and some also install it like Tian Run Solar Energy,

which imports thermo-syphon tubular vacuum SWH systems from China. A 200 litre system suitable for household

installation is available for EUR 900, including installation.

I.3 Local production of solar panels

In October 2013 FUNAE finished the installation of a PV panels manufacturing facility in Beluluane, District of

Boane in the Province of Maputo. The facility will have the capacity to produce annually 5 MWp of solar panels from

components imported from the Indian manufacturer Angelique International Ltd., which also provided the

machinery for the factory and supervised its construction. This factory is the result of the cooperation between the

Governments of Mozambique and India.


20

Annex II - Relevant Government Regulations and

Institutions

II.1 Relevant government regulations

II.1.1 The 2009 Energy Strategy

On March 10, 2009, the Council of Ministers (Cabinet) approved the Energy Strategy12 with the vision to guarantee

the availability of energy to respond to the challenges of a sustainable socio-economic development. This document

encourages the use of new and renewable sources of energy, particularly solar (photovoltaic and thermal) and wind

power. As most of the Mozambican electricity generation comes from large-scale hydropower, one defines “new

and renewable energy sources”, to differentiate large-scale hydropower and from other kinds of renewable

energy, such as solar, wind and bioenergy13.

This strategy encourages the private sector and civil society to get involved in the dissemination of solar heating,

photovoltaic and wind energy. Government particularly encourages the establishment of companies and

associations for the production, commercialisation, assembling and maintenance of solar and wind energy in the

rural areas.

This strategy also reinforces the National Council for Electricity (“Conselho Nacional de Electricidade” - CNELEC)

as a regulator for the electricity sector and FUNAE congregates and manages all public funds for the promotion,

development and use of renewable energy. FUNAE is a key player in off-grid rural dissemination of renewable

energy sources for development, mostly for public services and government institutions. The difference between

off-grid and on-grid is not clearly defined, The “Electricidade de Moçambique” (EDM) being responsible for grid

electrification, but expansion plans of both entities are not well coordinated leading sometimes to overlap of

activities.

II.1.2 The 2011 Strategy for New and Renewable Energy

The Strategy for the Development of New and Renewable Energy14 was approved by the Council of Ministers

(Cabinet) on May 17, 2011 and is to be implemented over a 15 year period from 2011 to 2025. The strategy intends

to regulate and promote the use of renewable energy sources, with the objective of creating conditions for

communities living far away from the national grid to access energy resources. The strategy addresses mostly solar

and wind energy and small hydropower resources. The focus of the strategy is on electricity.

The 2011 strategy followed the earlier approval on October 14, 2009 of the “Policy for the Development of

New and Renewable Energy”15, with the objective of promoting the use and exploitation of available renewable

energy resources, in order to accelerate people’s access to modern energy sources and to create a platform

supporting investment in this subsector.

12 República de Mocambique 2009: “Estratégia de Energia” Boletim da República, I Série, no 22, Suplemento, Conselho de

Ministros, Resolução 10/2009 de 4 de Junho. 13 Hydropower is also included as a new and renewable energy source, but the limit is nowhere in the policy documents

defined. However, 1 MW is the upper limit of the hydropower projects that FUNAE defines as small. 14 Ministério da Energia 2011: “Estratégia de Desenvolvimento de Energias Novas e Renováveis para o Período de 2011 –

2025”. 15 República de Mocambique 2009: “Política de Desenvolvimento de Energias Novas e Renováveis” Boletim da República, I

Série, no 41, Conselho de Ministros, Resolução 62/2009 de 14 de Outubro.


21

The objectives of this strategy are to: (i) improve access to quality energy services, through renewable energy

sources; (ii) develop technology for use and conversion of renewable energy sources; and (iii) promote and

accelerate public and private investment in renewable energy resources.

This strategy identifies a large number of actions to develop the knowledge and regulatory framework for the

expansion of the utilisation of renewable energy sources and technologies in Mozambique. The strategy is separated

into two action lines, one for the isolated, off-grid systems and another for the systems connected to the EDM grids.

For off-grid solar systems the strategy proposes to:

Start a programme for the large-scale introduction of PV for lighting and water pumping systems.

Start a programme for the large-scale introduction of solar water and space heating.

Promote the manufacture, commercialisation and installation of PV systems for small loads and of water

and space heating systems.

Approve regulations for the manufacture, commercialisation and installation of PV systems for small loads

and of water and space heating systems.

Establish fiscal incentives and licensing to stimulate private sector participation.

Establish centres of demonstration and dissemination of solar technologies.

For off-grid wind energy and hydropower similar measures are followed.

The following fiscal incentives were devised to stimulate private sector participation in the off-grid sector:

Tax exemptions on electrical equipment imports are to be applied to rural electrification and expansion

projects and new connections16.

VAT exemptions are to be given for all rural electrification and expansion projects and new connections17.

Foreign companies contracted to implement rural electrification and expansion projects and new

connections are to be exempted from corporate profit tax.

However, the above fiscal benefits, pricing mechanisms, feed-in tariffs and other financial incentives as well as

regulations and licensing procedures are not yet structured, making commercial and private investments in

renewable energy sources less attractive.

Some actions proposed (only related to solar energy) are:

1. For households:

Install 50,000 systems for lighting with PV for off-grid households18.

Insure the electricity supply of 5,000 fridges.

Insure the electricity supply of 2,000 televisions.

2. For social and public infrastructure:

Install 5,000 PV systems for water pumping.

Install 20,000 PV systems for lighting and other services.

Install PV public illumination systems in all off-grid villages.

3. For households and community services:

Install 100,000 solar water heating systems.

4. For productive uses:

Install 5,000 renewable energy systems (not specified).

16 A 5% import tax is levied on “essential and capital goods”, 7.5% on “intermediate beneficial goods” and 20% on consumer

products. All these different taxes have been applied to PV products depending on the skills of the clearance agent and the acceptance of the custom officials.

17 Actually 17% VAT over the Cost of Insurance and Freight price is applied. But, Law No. 3/2012 provides a favourable VAT rate (calculated over only 40% of the Cost of Insurance and Freight value) for rural electrification projects with a component undertaken by a government agency.

18 For households it is also mentioned “and from small wind turbines”, clearly it is not well understood what the problems are of wind energy at this small scale and in isolated locations, therefore one could consider these objectives as being achieved only with the recourse to solar energy.


22

For on-grid connected systems the strategy proposes actions for the development of wind energy, hydropower,

biomass cogeneration, ocean energy (not specified which) and geothermal energy, but no details about solar energy

also when it comes to concrete actions. Nevertheless the proposed Feed-in Tariffs (see Chapter 2.1.3) do include

solar PV.


23

II.2 Relevant government institutions

II.2.1 Ministry of Energy

The Ministry of Energy (MoE) is the central state body established by Presidential Decree in March 2005 with

powers to manage, plan, promote and control the inventory and use of energy resources. In addition to that, the

MoE has the mandate for the development and expansion of the power, natural gas and liquid fuels supply and

distribution networks, and is responsible for studying, conceptualising and enacting energy policies. Relevant for

the solar energy market are two directorates: the National Directorate for Electrical Energy (Direcção Nacional de

Energia Eléctrica - DNEE) and the National Directorate of New and Renewable Energy (Direcção Nacional de

Energias Novas e Renováveis - DNER).

The National Directorate for Electrical Energy is a central technical body within the MoE that is responsible for the

analysis, preparation and elaboration of energy policies. Its main tasks are to: (i) elaborate and monitor the

country’s energy policy, (ii) promote the diversification of energy use and optimisation of the use of various energy

sources, and (iii) promote and maximise the rational use of national energy sources.

The National Directorate of New and Renewable Energy is given the mandate to develop policies and strategies,

and the legal and regulatory instruments for the promotion, development and use of renewable energy in

Mozambique.

II.2.2 Conselho Nacional de Electricidade

The National Electricity Council (“Conselho Nacional de Electricidade” - CNELEC) is a public entity created in

October 1997 with legal personality, financial and administrative autonomy to ensure the enforcement of the energy

law and promote development and expansion of energy services for the current and future consumers. This

organisation is weakly staffed and is not yet entirely fulfilling its independent regulatory mandate although the

situation is improving. However, the present power sector structure is such that it still does not require a regulatory

body.

II.2.3 Electricidade de Moçambique

EDM is a public company established in 1995 as national electrical utility, responsible for the generation,

transmission, distribution and sale of electricity throughout the country, but is mostly a transmission and

distribution company with few generating assets. EDM is a strong company at technical level; but the company is

not financially sustainable in the long run due to the lack of real tariff adjustments and its political mandate to

expand access quickly.

EDM operates with a three-year performance contract with the government and is one of the very few business

entities in Mozambique that has a structure, management and measurable output delivery. EDM applies cross-

subsidisation on a large scale. This can now be tracked thanks to the creation of appropriate business units and the

separation of accounts. The existence of a uniform tariff structure throughout the country means that there is a

transfer of funds from urban to rural areas. Furthermore, the tariff structure across user categories is progressive

and therefore pro-poor: the kWh price increases with increased domestic consumption, which is an indicator for

higher income and hence higher affordability. At the end of 2011 EDM had electrified 107 of the 128 districts of

Mozambique (see figure in Annex III). However, an electrified district means the district capital and some major

towns, the most of the district being still beyond the reach of the grid, for domestic consumers the electrification

rate will be 25% at the end of 2013, a remarkable achievement from 12% in 2007. This means that around 6 million

people have access to electricity (estimated population 23.7 million in 2012), or 1.2 million connections.


24

II.2.4 Fundo Nacional de Energia

FUNAE is a public institution with legal personality, financial and administrative autonomy. FUNAE operates at

national level to develop, produce and use renewable energy sources, promote energy conservation and rational and

sustainable management of power resources. FUNAE currently acts both as a fund and as executing agency

responsibilities which could eventually prove difficult to manage in the long-term.


25

Annex III – Electrified districts in Mozambique

It should be noted that often not much more than the district capital is electrified. Even close to Maputo there are

un-electrified villages.

Figure 1: Electrification map of Mozambique

Source: EDM 2011, p. 20


26

Annex IV – Diesel generator mini-grids

Figure 2: Map of diesel generators in Mozambique

Source: FUNAE 2014

1. Panda – Vila Sede

2. Panda – Mawaela

3. Mabote – Vila Sede

4. Vilanculos -Mapinhane

5. Govuro – Vila Save

1. Massangena

2. Chicualacuala

3. Chigubo

1. Machaze - Vila Sede

2. Machaze - Save

3. Tambara - Vila Sede

4. Tambara - Nhacafula

5. Macossa – Vila Sede6. Sussendenga - Dombe

1. Machanga - Vila Sede

2. Chibabava Vila Sede

3. Maríngue Vila Sede

4. Chemba – Mulima

5. Gorongosa – Canda e Vanduzi

1. Changara - Vila Sede

2. Tsangano - Vila Sede

3. Chiuta - Vila Sede

4. Marávia – Vila Sede

5. Zumbo - Vila Sede

1. Magude – Mahele

2. Magude – Panjane

3. Magude Mapulanguene

4. Manhiça – Calanga

5. Manhiça – Maluana6. Matutuíne - Madjadjane

7. Moamba – GOANE I

8. Marracuene - Machubo

1. Mongicual - Vila Sede

2. Mongicual – Naminge

3. Mongicual - Quinga

4. Lalaua – Vila Sede

5. Angoche - Namaponda6. Nacaroa – Vila Sede

7. Nacaroa – Inteta Sede

8. Nacaroa – Muapili

9. Mecubúri – Vila Sede

10.Meconta – Corrane Mecua11.Mogovolas – Calipo

12.Moma – Macone Pilivili

13.Moma - Larde

14.Muecate – Vila Sede

15.Murrupula – Namitotelane16.Murrupula – Cazuzu Sede

17.Mossuril – Matibane Sede

18.Monapo – Itoculo Ofensiva

19.Erati – Namapa Sede

20.Erati – Lúrio21.Rapale – Sua Sua

22.Rapale – Namaita Sede

23.Ribaue – Mucuasse

24.Ribaue – Iapala Nore

25.Ribaue Iapala Riane

1. Palma – Pundanhari

2. Mueda

3. Muidumbe

4. Quissanga – Mahate

5. Balama – Mavaia6. Namuno Hucula

7. Mocimboa da Praia

8. Macomia

1. Mavago – Vila Sede

2. Nipepe – Vila Sede

3. Ngauma – Vila Sde

4. Sanga – Vila Sede

1. Chinde – Micaune

2. Lugela


27

Annex V – List of Provincial PV Retail companies

Table 8: List of provincial PV retail companies

Name Province Address

Products sold

Solar

lantern

Residential Institutional Water

pumping

Public lighting

Tenwin Electrodomésticos Manica Av. do Trabalho X x x

Sena Centro Chimoio Manica Estrada Nacional nº 6 X x

Electro-Montadora Manica Av. 25 de Setembro X x x

Mafuia Manica Estrada Nacional nº 6 x x

Electro Chapo Manica Av. 25 de Setembro X x x x

Mercado Feira Manica x x

Blue Haven Manica Rua de Lichinga x x

Tenwin Electrodomésticos Nampula Av. 3 de Fevereiro x x

Sociedade do Niassa Lda. Nampula Av. Eduardo Mondlane x x

Expresso Photo Boutique Nampula Av. Paulo Samuel Kamkomba x x

Billex Enterprise Nampula Av. Paulo Samuel Kamkomba x x

Electro Metal Lda. Nampula Rua de Monomotapa x x x x

Afritool Nampula Av. José Macamo x x x x

Electro Ferrageira Nampula Av. Paulo Samuel Kamkomba X x x

Electro Beira Sofala Baixa X x x x x

Metalex Maputo Av. Guerra Popular X x x x

Centro Comercial de Maxixe Inhambane Estrada Nacional nº 1 X x x x x

Source: Author’s adaptation from FUNAE 2014


28

Annex VI – List of other Companies and contacts

Table 9: List of other companies and contacts

Contact Name Cel/Tel (+258) Address Email - website

Companies

MOÇITALY Emilio Cipollini 828055550 Avenida Salvador Allende 364, Maputo [email protected]

ENERGIL Adamo Amad Seni 82 622 8618 Beira [email protected]

S&S TELECOMUNICACOES Ibraim Usta 82 388 7570 Cap R Marques Costa 1326, Beira [email protected] / [email protected]

SOLAR PROJECT Rogerio Ventura 82 934 4336 Av. da Gaveia 33-5º, Maputo [email protected]

TES - TOP Munir Sacoor 82 430 1030 Avenido Karl Marx 1877 R/C, Maputo [email protected]

ELECTRO TRADING M. Chabir 82 301 9700 Avenida dos Presindentes 68, Maputo [email protected]

SAVON TRADING Scott Von Memerty 82 563 3100 Based in Zimbabwe and Chimoio [email protected] / www.savonprime.com

SELCO Muhammad Zubair 82 489 2290 Avenido Karl Marx 1877 R/C Maputo [email protected] / [email protected]

GREEN LIGHT Boris Atanassov 82 020 6274 Maputo [email protected]

http://www.greenlight-info.com/Mozambique

VESTWIN Arlindo Massango 82 570 6266 Rua de Comercio 72/74 Machave, Maputo [email protected]

http://www.winvest-gmbh.com/produkte/vestwin

FOSERA SA Valeriano Pedro 82 604 5012 Av. Base N'tchinga 210, Maputo [email protected] http://www.fosera.com

SOLARKOM, LDA Steven Dils 82 303 897 Rua dos Pescadores 300/C Matola, Maputo [email protected]

KADAMBO, LDA Moiseis Paco 82 332 0014 Avenida Acordos de Luzaka 1883-1º, Maputo [email protected]

CLED MUXUNGUE Maphossa 84 807 9967 Muxungue

EREL LDA Boaventura Cuamba 82 309 8120 Rua D nº 35 – Bairro Coop, Maputo [email protected]

ENERGIAFRICA 84 242 6680 www.energiafrica.com

SWISSSOLAR, LDA Av. Amilcar Cabral, 527 1ºEsq, Maputo www.swissssolar.co.mz

AGRO ALFA 21 465 911 Av. de Angola, 2475, Maputo www.agroalfa.co.mz

TIAN RUN SOLAR ENERGY - 82 088 8841 Avenida Tanzania 148, Maputo

Other contacts

FUNAE Miquelina Menezes 82 321 6550 Rua da Imprensa, 256, 6º, Maputo www.funae.co.mz

AMES-M Dirk van Eijk 82 786 5297 Rua Kamba Simango, no432, C/F Maputo [email protected]

SOLTRAIN Programme Geraldo Nhumaio 82 523 9055 UEM - Av. J. Nyerere - Campus no3453 [email protected]

Assoc. Hotéis Sul de

Moçambique

Rui Monteiro 21 314 970 Rua Sé – Hotel Rovuma 114, Loja 35, Maputo [email protected] / www.ahsmocambique.com

Source: Author’s composition

mailto:[email protected]






http://www.savonprime.com/




http://www.greenlight-info.com/Mozambique

http://www.winvest-gmbh.com/produkte/vestwin


http://www.swissssolar.co.mz/

http://www.agroalfa.co.mz/



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