Written By: Faith Jemosop
Gridworks, the UK government-backed developer of electricity networks in Africa has secured a $5 million grant from the U.S. International Development Finance Corporation (DFC) to fund critical development work on the Chimuara–Nacala transmission project in Mozambique.
The funding will support technical, legal, and environmental studies and other activities that are essential to bring the project to financial close. With this injection, the project moves closer to becoming Mozambique’s first privately financed independent transmission line.
The DFC grant is designed to de-risk the project’s early stages by paying for the groundwork that will make future investors and lenders confident enough to commit. At this stage, even a relatively small grant can have an outsized impact, helping to unlock hundreds of millions of dollars in construction finance.
The Chimuara–Nacala transmission project is expected to:
- Strengthen electricity supply between central and northern Mozambique
- Improve grid stability and reliability
- Enable integration of more renewable power
- Stimulate industrial growth in the north
- Bring Mozambique closer to universal energy access
Scope and Scale
The Chimuara–Nacala plan aims to create a high-voltage spine connecting the central region of Chimuara to the northern port city of Nacala. The full scope includes:
- 400 kV line from Alto Molócuè to Namialo (~272 km)
- 220 kV link from Namialo to Nampula (~98 km)
- 220 kV link from Namialo to Nacala-à-Velha (~90 km)
- Two new substations plus upgrades to the existing Nampula substation
In total, the project covers around 460 km of transmission infrastructure, built in three phases. Phase I is already underway by Mozambique’s state utility, Electricidade de Moçambique (EDM), while Phases II and III the main focus of this grant are being developed in partnership with Gridworks.
The People and the Money
Gridworks is wholly owned and supported by British International Investment (BII), the UK’s development finance institution. Through its local vehicle, GW Mozambique Investments LLP, it is leading the private-sector side of the project in direct partnership with EDM.
The DFC grant will specifically finance:
- Environmental and social impact assessments
- Detailed engineering designs
- Legal and regulatory compliance work
- Procurement preparation and tendering processes
The International Finance Corporation (IFC) is also providing parallel development funding, with a strong emphasis on ensuring compliance with international environmental and social performance standards.
Total Price Tag and Economic Impact
The overall cost of the Chimuara–Nacala project is estimated at around $400 million. That puts it among Mozambique’s largest planned grid investments.
Beyond the technical achievement, the project’s economic and social impacts could be significant.
- Energy access: Roughly 40% of Mozambique’s population still lacks access to electricity.
- Industrial growth: A stable, high-capacity grid could attract industries to the north, including agribusiness, mining, and manufacturing.
- Renewable integration: The line will provide capacity to connect more solar, wind, and hydro generation to the national grid.
Why This Grant Is a Big Deal
Transmission lines are expensive and take years to build, but before a single tower goes up, there’s a mountain of preparatory work:
- Land surveys and geotechnical studies
- Environmental and social assessments
- Stakeholder engagement with affected communities
- Legal and contractual agreements
- Detailed engineering designs and procurement planning
This is the work the DFC grant will fund. Without it, the project risks delays, increased costs, or even failure to reach construction financing.
DFC’s involvement also signals U.S. government support for private infrastructure investment in Africa. That signal often helps to bring in other development finance institutions and commercial banks.
The path ahead for Phases II and III includes:
- Completing environmental and social studies
- Finalizing concession and regulatory terms with the government
- Producing detailed engineering and procurement documents
- Running competitive tenders for construction and equipment suppliers
- Securing final financing from commercial lenders and DFIs
If these steps proceed smoothly, financial close could be achieved within the next two years, followed by several years of construction.
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While promising, the project faces familiar challenges for large-scale African infrastructure:
- Land acquisition and possible resettlement
- Environmental concerns, particularly in biodiversity-sensitive areas
- Regulatory clarity on tariffs and private sector participation
- Political and security risks in certain northern provinces
- Community engagement to secure social licence and avoid disputes
The presence of IFC and DFC suggests these issues are being actively managed through strict compliance requirements and stakeholder consultations.
Voices from the Project
Chris Flavin, Interim CEO of Gridworks, has called the Chimuara–Nacala line “a crucial project connecting the central and northern regions that will create economic opportunities, improve energy access, and boost renewable energy generation.”
Officials from DFC have emphasized that their support is part of a broader push to mobilize private capital for African infrastructure while ensuring high standards in environmental and social governance.
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The Chimuara–Nacala project could become a model for privately financed transmission infrastructure in Sub-Saharan Africa. If successful, it would prove that private capital with the right development-stage risk mitigation can be mobilized for grid backbone projects, not just generation plants.
It also aligns with regional integration goals. Mozambique’s enhanced transmission capacity could support future electricity exports through the Southern African Power Pool (SAPP), benefiting neighboring countries as well.