Use of modern energy is a strong factor in economic growth and in human development. Modern healthcare, a vibrant private business sector and education all entail the use of energy.
| "The use of poorly ventilated stoves can have the same effect as smoking two packages of cigarettes per day.” UNDP |
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| The lack of access to modern energy (electricity, gas and oil products) is a major part of being poor and without means of economic opportunities and overdependence on traditional forms of energy (biomass such as wood, charcoal, dung from animals or agricultural waste) has a number of detrimental effects on the lives of the poor, undermining people’s health and environment. |
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Energy Situation in Mozambique
Mozambique is endowed with huge energy resources. The Cahora Bassa dam, is one of the largest hydropower installations in Africa. With 2,075 MW, it is about half the size of the installed capacity of E2, the company that services eastern Denmark and Mozambique has the potential to build capacity equivalent to 6 times of Cahora Bassa. Moreover reserves of natural gas are being exploited and gas is being exported via a new pipeline to South Africa. The chances of locating oil appear to be promising. Mozambique also just started exploring its reserves of coal, which are estimated at 10 billion tons.
In its national strategy to combat poverty, the Government of Mozambique has identified the energy sector as one of the main areas for investment. (See insert).
Already electricity is being exported to neighbouring countries and it is also the foundation for the major foreign direct investments. Provided the infrastructure can be upgraded Mozambique has the energy to sustain a considerable rate of growth.
Yet the lives of Mozambique’s poor are characterised by the absence of the comforts and services associated with modern energy. Despite Mozambique’s huge production of electricity, only some 5% of households have access to electricity and 85% of all energy needs are covered by traditional fuels, mainly wood and charcoal.
Reflecting the national priorities, Energy Sector Programme is one of the pillars of the cooperation between Mozambique and Denmark. The programme provides support to different levels in the sector.
For Mozambique to exploit its energy resources in the most effective way the Ministry of Energy must perform well. Denmark supports the Ministry to formulate a comprehensive national energy master plan, covering all types of energy needs and resources. The plan will guide future energy investments, whether funded by Government or external donors. |
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The availability of electricity is essential because it widens opportunities for initial initiatives and activities by which the people can improve their welfare. It is also a critical factor in promoting the structural changes necessary for rapid economic growth. Investment in complementary economic activities and alternatives o agriculture (agro-industries, other branches of industry and services) depend on the availability of electricity. These activities are necessary for raising productivity and production in the agricultural sector, and for absorbing the labour surpluses that will arise in agriculture, as productivity increases.
Investment in complementary activities and alternatives to agriculture tend to take place in areas/regions dependable sources of energy. As a result, the availability of energy is a major factor determining the existence or eliminating of regional imbalances in economic and social development.
The poorest segments of the population (above al, in rural areas) depend almost exclusively on firewood and charcoal as energy sources. With a growing population, the danger arises of environmental degradation, especially in the most populated areas. For this reason, it is very important to pursue research and development of alternative energy sources.
ACTION PLAN FOR THE REDUCTION OF ABOLUTE POVERTY, 2001-2005.
Mozambique’s national strategy for combating poverty. |
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The Energy Fund (FUNAE) funds energy projects in rural areas, which are otherwise difficult to reach with investments. FUNAE seeks to promote projects that ensure economically and environmentally viable energy provision to the poor in rural areas. As part of the programme, FUNAE receives assistance from Denmark in terms of advisers and financing for projects.
Denmark also supports the national power utility Electricidade de Moçambique (EdM). Denmark has funded the reorganisation of EdM into a commercially competitive organisation, well equipped to expand and operate the national grid to new parts of the country. Furthermore, a number of investment projects, that expand and strengthen the national grid, are being carried out as part of the programme.
Support has also been given to a number of environmental projects, the drafting of a gender strategy, which now serves as a tool when appraising new energy projects, as well as the implementation of the national strategy against HIV/AIDS in the energy sector.
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