Overview

Table: Power Forecasts (2023-2028)

e/f = BMI estimate/forecast. Source: EIA, IRENA, BMI

Mozambique possesses the highest power generation potential in Southern Africa, with an estimated potential output of 187 gigawatts from coal, hydro, gas, wind, and solar sources. Currently, the majority of power generation stems from hydroelectric projects, but the future will see natural gas and renewable energy sources contributing significantly, projecting to account for 30% of total energy generation within the next decade according to Business Monitor International (BMI).

The government targets universal electrification by 2030. Electricidade de Moçambique (EDM), the nation’s national electricity utility, is aiming for over 300,000 new connections annually, including more than 100,000 off-grid connections. However, the development of a robust transmission and distribution network, especially in rural areas, remains a challenge. Near-term energy demand will be primarily driven by industrial and urban sectors, as a significant portion of the population finds current tariff rates unaffordable, despite being highly subsidized.
EDM operates at a financial loss due to subsidizing electricity tariffs for residential consumers who cannot afford the unsubsidized cost. To address this, EDM is implementing structural and operational improvements, particularly in loss reduction. National statistics indicate that a third of EDM’s customers, concentrated in the southern regions, generate 65% of its revenue. The development of new power projects and EDM’s expansion efforts are hindered by limited financing and complex bureaucratic processes.

Several Independent Power Producers (IPPs) are active in Mozambique, managing projects in thermal and solar energy, with wind and hydroelectric projects underway. IPPs must secure an offtake agreement with EDM and typically rely on development banks for financing. The government supports renewable energy projects, having initiated public tenders for solar and wind projects, and is exploring battery storage solutions.

Mozambique is a net exporter of energy to other countries within the Southern African Power Pool (SAPP), with South Africa being the largest importer. Energy exports are viewed as a crucial economic driver, prompting the government to pass a new electricity law simplifying permitting processes and encouraging IPP activities. Small developers, especially mini grids up to 10 MW, benefit from a simplified licensing process, significantly reducing previous bureaucratic hurdles. New legislation also exempts VAT on imported electrification equipment.
The country’s largest power generation facility is the Cahora Bassa hydroelectric dam, operated by the government-owned Hidroeléctrica de Cahora Bassa (HCB). HCB distributes 65% of its 2075MW capacity to South Africa, while the remaining 35% serves northern Mozambique and Zimbabwe. HCB operates on the Zambezi River in Tete Province.

Mozambique houses several thermal, and renewable plants, with the latest addition being the 420MW Temane Combined Cycle Gas Generation plant, expected to commence operations in 2026. This project benefits from a $200 million loan from U.S. DFC. Additionally, other renewable projects are being proposed and anticipated to experience substantial growth over the next decade. Finally, in October 2025, the government signed a concession agreement to develop a 1,500MW hydroelectric project, Mphanda Nkuwa, by a consortium led by French company Electricité de France (EDF) in Tete Province.

Frequent power shortages, primarily due to extreme weather events, compel EDM to rely on expensive emergency power solutions, presenting opportunities for U.S. companies specializing in emergency and backup generation.

Leading Sub-sectors

•    Gas turbines, engines, solar panels, and wind turbines
•    Cables and electrical components
•    Substation and transmission line components
•    Engineering, procurement, and construction (EPC) services
•    Financing and insurance services
•    Grid management software
•    Smart metering systems

Opportunities

Mozambique’s domestic energy demand continues to rise. The Southern African Development Community (SADC) member countries anticipate higher power demand, presenting opportunities for Mozambican energy exports.

Generation

The Mphanda Nkuwa Hydroelectric Project on the Zambezi River is expected to generate 1,500 MW, enhancing Mozambique’s electrical capacity. With an estimated cost of $4.5 billion, this project will position Mozambique as a regional energy hub, supporting domestic power needs and exporting to neighboring countries. Development of this project is led by a consortium led by French company EDF. Mozambique’s Renewable Energy Auctions Program (PROLER) invites solar and wind project tenders ranging from 30-50MW.

Transmission

The Mphanda Nkuwa project incorporates a 1,300-kilometer high-voltage transmission line from Tete Province to Maputo, essential for distributing power domestically and to export markets.

Distribution

EDM seeks solutions for theft monitoring and reducing commercial and technical losses.

Trade shows 

•    Mozambique Mining and Energy Conference | May 6-7, 2026, Maputo, Mozambique
•    Mozambique Gas and Energy Summit | September 1-3, 2026, Maputo, Mozambique