In a move that could reshape southern Africa’s energy landscape, Mozambique has secured World Bank support for the $6 billion Mphanda Nkuwa hydroelectric plant, marking the region’s largest such project in half a century. The ambitious initiative is poised to deliver a powerful jolt to the country’s electrification efforts, promising to light up millions of homes and businesses, boost economic growth, and position Mozambique as a key power exporter in the region.
The Mphanda Nkuwa plant, scheduled to begin operations in 2031, will be located 60 kilometers (about 37 miles) downstream from the massive Cahora Bassa dam on the Zambezi River. With an expected output of 1,500 megawatts, it’s set to play a central role in closing the 10,000-megawatt power deficit that plagues southern Africa, leaving millions without reliable electricity. According to The Associated Press, the World Bank’s involvement, while not direct financing, includes concessional funding for legal and environmental work, support for transmission lines, partial risk guarantees, and political risk insurance—a package designed to attract and reassure private investors.
Mozambique’s path to this moment has been anything but straightforward. Since gaining independence from Portugal in 1975, the nation has weathered a brutal civil war, periodic violence even after peace agreements, and, more recently, an Islamist insurgency in the north that forced a $20 billion gas project by TotalEnergies to a standstill. Yet, the country’s leadership remains undeterred. President Daniel Chapo, who assumed office after a contested 2024 election, has rallied public support for the electrification push, making universal access a centerpiece of his administration’s agenda.
"Electricity isn’t just light, it’s a chance," World Bank President Ajay Banga told The Associated Press during his July 2025 visit to Mozambique, where he toured electrification projects and met with local entrepreneurs. One such entrepreneur, Hermínio Guambe, has seen his fortunes transform thanks to electricity. Once limited to cutting hair in a dim, powerless shop, Guambe now runs a bustling barbershop equipped with hair dryers, while the local pharmacy can finally stock medicines that require refrigeration. "These are the kinds of businesses that drive economies," Banga remarked.
The numbers tell a compelling story. Mozambique’s electricity access has nearly doubled in just six years, soaring from 31% in 2018 to 60% by 2024, according to Electricidade de Moçambique (EDM), the state-run energy supplier. Last year alone, EDM connected 563,000 homes, with plans to reach 600,000 more in 2025. The government’s goal is nothing short of universal access for all 33 million citizens—most of whom live in rural areas—by 2030, primarily through renewable sources like hydroelectric and solar energy.
Despite this progress, challenges remain. "Our country is quite big, and it’s not so easy to go everywhere with the national grid," EDM chairman Joaquim Ou-Chim explained. Off-grid solutions, mainly solar-powered, currently account for about 10% of Mozambique’s electricity access, with more projects in the pipeline to reach remote communities. For many Mozambicans, these off-grid systems are the first taste of reliable power—opening doors to new businesses, improved healthcare, and better education.
Yet, as Mozambique races to electrify, the financial stakes are high. Public debt has climbed to roughly $17 billion as of the first quarter of 2025, with a record $2.1 billion spent servicing debt in 2023, according to the Finance Ministry. Energy consultant Evaristo Cumbane, speaking to The Associated Press, urged caution: "The World Bank is not a godfather, it is not god. The guy is here on business. These are not donations." The final cost of the Mphanda Nkuwa project is still being hammered out, with estimates ranging between $5 billion and $6 billion—a massive sum for a country where per capita income remains among the world’s lowest.
Nevertheless, the potential payoff is significant. Mozambique already exports excess power to neighbors like South Africa and Zimbabwe, and the new plant could substantially increase those revenues, providing much-needed foreign exchange. In Banga’s words, "Mozambique has the resources—gas, hydro, solar—and it’s already the biggest supplier of excess power to southern Africa." The project is being developed by a consortium that includes global energy giant TotalEnergies, French utility Électricité de France, and Mozambique’s own Hidroeléctrica de Cahora Bassa.
This mega-dam isn’t happening in a vacuum. Across Africa, hydropower is being touted as a cornerstone for sustainable development, even as about 90% of the continent’s potential remains untapped, according to the World Bank and the International Hydropower Association. Ethiopia is preparing to inaugurate its $4 billion Grand Renaissance Dam, which will eventually generate over 5,000 megawatts and double the nation’s power output—despite fierce opposition from Egypt. In the Democratic Republic of Congo, the World Bank is backing the colossal Inga 3 project, which could send electricity as far afield as South Africa and Nigeria.
For Mozambique, the stakes are both economic and personal. In a poor neighborhood outside Maputo, 38-year-old Aurélio Arlindo has lived without electricity for years. But with new power poles rising nearby, hope is in the air. "It’s really coming. I am just waiting," he told The Associated Press, dreaming of opening a cold drinks stall once the lights come on.
As the world’s biggest development lenders pivot away from direct aid toward private sector–led growth, projects like Mphanda Nkuwa are seen as templates for the future. Banga noted, "Many shareholders, even in Europe, are reducing their overseas development assistance budgets because they have to divert the money to defense and their own needs. This is the way it is." The World Bank’s role, he emphasized, is to provide the tools and assurances that enable big, risky projects to move forward—without saddling countries with unmanageable debt.
Still, experts like Cumbane caution that mega-projects aren’t a panacea. Mozambique is blessed with rivers, sunshine, wind, and coastlines, he pointed out, and smaller, local sources of energy will be crucial for reaching the country’s most far-flung communities. "The real Mozambique is in rural, remote areas," he said, underscoring the need for a balanced approach that blends large-scale infrastructure with community-based solutions.
For now, the hum of new businesses and the glow of electric light in once-dark villages are signs that change is underway. The Mphanda Nkuwa project stands as both a symbol of Mozambique’s aspirations and a test of its ability to balance ambition with prudence. As the nation moves forward, the world will be watching to see if this mega-dam can deliver on its promise of power, prosperity, and possibility.