Efforts in the sector will be framed by supporting national existing institutional and policy efforts to engage Mozambique in climate discussion. Reference will therefore be important to tools such as the National Climate Change Adaptation and Mitigation Strategy (NCCAMS 2013-2025), the Strategy and Action Plan for Gender, Environment and Climate Change and the Government’s national system for monitoring and evaluation of Climate Change in the NDC framework. Interventions will also build on relevant EU and international policy frameworks and initiatives, for instance in the forest sector, the EU communication on protecting and restoring the world forests, and related actions and the, the REDD+ strategy and the FLEGT Action Plan. By definition, climate and environmental challenges go beyond national boundaries and often highlight chances for common responses and commitments. The Southern African/Indian Ocean region is no exception to this dynamic. 




From transboundary conservation areas to the coordination of disaster management policies and the joint combat against wildlife trafficking, the actions under this priority area will be defined in full consideration of the potential of regional interventions and in coordination with neighbouring EU Delegations. Although Mozambique's hydro, solar and biomass potential is particularly interesting, the country is having an increasing share of its wealth from coal (the second-largest coal producer in Africa, with almost the entire production being exported) and natural gas (Temane gas field accounts for natural gas exported to neighbouring South Africa and in-country power generation, from 0% in 2012 to 35% of produced electricity in 2020). 



The income from fossil fuels in 2018 accounted already for 8.6% of the GDP, with the threat of the country being relatively highly exposed to carbon risks. Recent disinvestments in coal mining in the country show how real the risk is.  In addition, with only 6% of the population with access to clean cooking, the energy sector is still dominated by biomass, mostly for traditional residential use. This increases the pressure on forestry reserves.  Electricity access is still as low as 38% (up from 8% in 2006), below the average in sub-Saharan Africa (47%). With around 20 million people without access to electricity, Mozambique has the 6th biggest unserved population on the continent. The official goal is to achieve universal access by 2030 with 70% of the customers on-grid and 30% off-grid.





 In line with the Integrated Master Plan for Electricity Infrastructure for the period 2018-2043, Mozambique envisages to increase installed generation capacity from the current 2,638MW to 17,720MW to satisfy internal demand as well as to multiply export to members of the SADC. The EU aims to contribute to enhance access to renewable energy, with a particular focus on rural areas, through on-grid but also off-grid solutions. 


Reducing pressure on key biodiversity and forestry areas requires also reinforcing the nexus between energy, water and food in order to increase productivity, fight malnutrition and to create new job opportunities. Energy efficiency is also an essential cornerstone of a successful clean energy strategy, acting as a clean “fuel” to meet significant portions of consumer electricity demand. Efficiency also supports increased electricity access, job creation, affordability of renewable energy, inclusive connectivity, and economic growth. The support can build on lessons learnt from former EU support to the energy sector that followed a   two-pronged approach: an intensive and extensive preparation phase followed by an investment phase in which different instruments are linked together.



 The preparation phase includes the definition of a pipeline of bankable projects as well as capacity-building of both the public and private sectors to be able to translate this pipeline in concrete investments. This was accompanied by policy dialogue, close coordination among stakeholders, capacity building of the public and private sectors, the definition of the appropriate legal framework and support to early-stage project development. Support to the power utility and the regulator to increase their performance was also part of this approach, which resulted in the first renewable energy auction in the country.  

 

Boosting the SMEs’ investment in renewable energy will require further adapted blending tools and guarantees under the new EFSD+. As a result of cheaper renewable energy technologies, further support to auctions or similar competitive tendering will enable crowding out financing of coal and gas power plants.  In line with the Mozambique-EU Joint Declaration on Renewable Energy, the EU has been leading the policy dialogue over the last years on behalf of donors and will continue to play this role for Team Europe in the run-up to COP26 in Glasgow in November 2021 and beyond. The EU will ensure that support to energy will be aligned to the “policy first” principle regardless of the financial instrument used, including activities financed by the European Investment Bank. 



 The global transition to climate neutrality could replace today’s reliance on fossil fuels with one on raw materials, many of which we source from Africa, notably from Mozambique, and for which global competition is becoming fiercer. There is a high demand for graphite to meet the world’s surging battery industry. Leading the way is Mozambique, a big producer of the small and medium size flakes required for battery applications. During the first semester of 2019, 82% of their production went to China. Much of the exponential increase in Mozambique’s graphite shipments can be attributed to the Australia-based company Syrah Resources and its “Balama Graphite project”, located on a 106 km² mining concession within the Cabo Delgado province. 


Currently, the European Commission is shaping the “EU-Africa strategic partnerships on sustainable raw materials value chains” with a number of African countries. If Mozambique takes part, this partnership has strong potential to deliver impactful benefits in terms of sustainability record of raw materials-based value chains, better integration of industrial value chains, mobilising funds for infrastructure, improving skills along the value chain and creating benefit in the mining sector. Also, the EU will continue its support to the Extractive Industries Transparency Initiative (EITI).