13 December 2021
- Russell Wells, Tim Steadman, Alexandra Blake, Inaamul Laher, Thomas Hobbs Martin, Sohini Kar-Purkayastha
- London, Paris, Abu Dhabi
Clifford Chance advises on Temane, a Transformational Power Project in Mozambique
International law firm Clifford Chance alongside local Mozambican counsel Pimenta & Associados has advised Globeleq, Africa’s leading independent power company and its consortium partners on the development and financing of the 450MW gas fired Temane power project in Mozambique. The project will supply low cost, reliable power in a country where only 34 percent of people have access to electricity, and many rely on inefficient, small-scale power generation. Once completed, the Temane project will increase the supply of efficient and affordable energy to households, businesses and industries contributing to social and economic development in Mozambique and the region, as well as enable the connection of future renewable generation projects to the Mozambican grid.
The project anchors a new 563 km high-voltage transmission line which secures the interconnection of the southern grid to the central and northern grids of Mozambique for the first time ever, establishing a corridor of electrification and ensuring a more stable and secure Mozambican grid. It also anchors an upstream gas development that will provide a new source of Liquefied Petroleum Gas (LPG), which will ensure that there is less use of charcoal and firewood, and so help bring about less deforestation, and better health for the rural population of Mozambique.
Russell Wells, Partner at Clifford Chance said: "We are incredibly proud to have advised on a project that will have a transformational impact, direct and indirect on the people in Mozambique while paving the way towards greater renewable projects in future. This project is a working example of the role of private developers and finance in building resilience for a just social and economic transition."
Developed, designed, constructed and operated under a 25-year Build-Own-Operate-Transfer (“BOOT”) concession agreement, the project will sell its power to the Government of Mozambique’s utility, Electricidade de Moçambique (EDM). It is part of the wider World Bank-backed Temane Regional Electricity Project, which will integrate Mozambique's disjointed power systems, and play an integral role in the South African Power Pool's efforts to widen access to electricity and reduce the carbon intensity of Southern African power systems.
The power station is under development by a consortium comprising Globeleq, EDM and Sasol Africa. Debt financing of the US$652.3 million project is being provided by IFC, together with its "B" loan participants FMO and Emerging Africa Infrastructure Fund (together US$253.5 million), US International Development Finance Corporation (DFC) (approximately US$191.5 million) and the OPEC Fund for International Development (OPEC Fund) (US$50 million). The Multilateral Investment Guarantee Agency (MIGA) has provided up to $251.3 million in political risk insurance to the private sector equity investors.
The cross border Clifford Chance team was led by Russell Wells, with support from Tim Steadman, Alexandra Blake, Inaamul Laher, Yemi Adekoya, Thomas Hobbs Martin and Sohini Kar-Purkayastha