Mozambique will start building its first large scale solar plant in early 2017, after the international independent solar power producer, Scatec Solar, in partnership with Norfund, signed a $80m power sale deal with state-owned utility company Electricidade de Mozambique (EDM) for 25 years, Reuters reported.

The 40MW plant will be built near the city of Mocuba in Mozambique’s central, coastal Zambézia Province. It will deliver 77,000MWh per yea of power to the national grid and produce energy for some 175,000 households. The solar project is backed by the World Bank’s private-sector lending arm, the International Finance Corporation, and the public-private Emerging Africa Infrastructure Fund, accordingly to ESI Africa.

The signing ceremony of the Power Purchase Agreement (PPA) took place in Maputo late October in the presence of the Norwegian Minister of Foreign Affairs, Børge Brende, the Mozambican Minister of Mineral Resources and Energy, Letícia Klemens, as well as EDM’s Charimand and CEO, Mateus Magala.

Mozambique has been hit by the worst drought in 35 years, which has reduced water levels in its huge Cahora Bassa hydroelectric dam. Accordingly, the project presents an important first step in realising Mozambique’s ambition to increase renewable power generation in its energy mix. Norfund’s CEO, Kjell Roland, said: “access to reliable energy is a prerequisite for development. Only 3% of the world’s electricity is generated in Africa, although 15% of the world’s population lives here.”

Scatec Solar owns solar plants in South Africa and Rwanda, with others under development in Mali, Nigeria and Kenya.