World Bank prioritizes Fossil Fuels and Energy Exports instead of Renewables and Energy Access in Mozambique

08.09.2020

Mozambique is one of the world’s most vulnerable countries to natural disasters and climate change. The cyclones Idai and Kenneth in 2019 were the worst natural disasters to hit southern Africa in over two decades, causing over 1.8 million people to need assistance.

A rapid energy sector transformation from fossil fuels to renewable energy is necessary to combat the climate crisis. Given that access to energy is crucial to eliminate poverty, the transformation must also address the energy needs of the poor. Mozambique has one of the lowest rates of electrification in Africa at only 28 percent, leaving over 22.7 million people without access to electricity.[iii]Most people without access to energy live in rural communities, where mini- and off-grid renewable solutions are the most cost-effective and climate-safe options.

In recognition of these facts,the World Bank Group (WBG) and the government of Mozambique have committed to achieve the objectives of both the United Nations’ Sustainable Development Goal 7 of reaching universal energy access by 2030 and to the Paris Climate Agreement of limiting global average temperature rise to 1.5°C and making financial flows consistent with low greenhouse gas (GHG) development.

A recent review of WBG´s operations in Mozambique detailed in a new report from the Swedish Society for Nature Conservation (SSNC), Recourse and the African Coalition for Sustainable Energy and Access (ACSEA) found that overall, the WBG’s energy sector assistance in Mozambique undermines the Paris Climate Agreement and falls considerably short in what is necessary to meet universal energy access in Mozambique.

Despite Mozambique’s vast potential for renewable energy, WBG prioritizes fossil fuels over renewable energy.  The finance is 16 times greater for fossil fuels than for renewable energy. In addition, through multiple policy reform and capacity building operations the WBG has paved the way for Mozambique to become Africa’s largest LNG exporter and one of the world’s largest coal exporters. Hence, the support is not in alignment with the Paris Climate Agreement’s goal of making financial flows consistent with a pathway towards low-GHG development.

The current electrification rate is inadequate for the country to reach universal access in 2030. Despite the WBG’s commitment to centre it´s energy practice on achieving universal access, only 10 percent of its energy sector project finance in Mozambique is targeting new connections. Instead of prioritizing domestic energy needs, the WBG is prioritizing development and exports of fossil fuels which is depressing the availability of finance for energy access.

Augustine NJamshi of ACSEA says: “Given Mozambique’s severe climate change risks and substantial electricity deficit, the WBG must end all public assistance for fossil fuels and scale up funding for renewable energy, including mini- and off-grid solutions in rural communities.”

“The WBG’s finance directed at new household connections represents only 10 percent of its overall energy sector finance in Mozambique. In order to make energy access a true priority the WBG can and should direct more finance to new connections. ” adds Nezir Sinani of Recourse

Anna Östergren of SSNC further adds “Given that the current electrification rate is inadequate, the WBG must perform a gap analysis on universal access in order to assist the government to identify where gaps exist and how the gaps will be addressed in order for them to reach universal energy access by 2030. The WBG should also assist Mozambique to prioritize domestic energy needs ahead of energy exports.”

 

For more information, please contact:

Augustine NJamshi of the African Coalition for Sustainable Energy and Access

augustine@acsea54.org

 

Anna Östergren of the Swedish Society for Nature Conservation in Sweden

+46 76 169 5489 or anna.ostergren@ssnc.se

 

Nezir Sinani of Recourse in the Netherlands

+31 61 482 0789 or nezir@re-course.org

 

Endnotes

[iii]Based on United Nations estimates the current population of Mozambique is 31,493,880 (upfrom 28,751,000 in 2016). This would mean approximately 22,675,594 people do not have access to electricity (72% * 31,493,880 = 22,675,594).