Investment strategy for a private direct investor in Mozambique - edX course
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Presentation regarding the final project of "Unlocking investment and finance in EMDEs" by World Bank and edX
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Investment strategy for a private direct investor in Mozambique - edX course
- 1. Investment strategy for a private direct investor in an EMDE country Unlocking Investment and Finance in Emerging Markets and Developing Economics (EMDEs) – Final Project Ana Pimenta, July 2019
- 2. Investment opportunity – solar energy • One of the most cost-effective sources of energy • Expected to be one of the major investment themes of the next 10 to 20 years • Widely recognised as a crucial component in addressing our worldwide need for secure, affordable and renewable energy • Environmental benefits • Technological developments with shorter construction periods (compared with wind energy projects for example) • Lower operational risk because of the predictability of solar irradiation • Further consolidation and changes in the future • Scalability, in terms of asset, investment and profit • Worldwide popularity is increasing Source: EY
- 3. Why investing in Mozambique? • Rich and extensive natural resources • Wildlife and conservation areas • Annual average GDP growth among the world’s highest • Generally considered an aid success story by IMF and the World Bank • Stable governments • Industry and tourism sectors growing • Young population and increasing literacy rate
- 4. Solar Energy potential in Mozambique • Very high solar potential in the country • Solar Energy potential = 23,000,000 MW • Currently installed = 3 MW • Under construction = 70 MW • Under study = 300 MW • New energy law expected to increase the private sector role • Low electrification rate • Government’s goal: All Mozambicans to have access to electricity by 2030 • Few actors in the market Source: Africa-EU Renewable Energy Cooperation Programme
- 5. • Macroeconomic environment • Political instability • Lack of transparency and regulation • Deficiency of infrastructures including transports • Financing difficulties Risks and threats Overcoming these risks • Get support from EMDE’s international institutions, not only to finance the project (IFC, ODA, IDA) but also advisory and technical help • Involvement of donors (including development institutions) from different countries to reduce risk and volatility • Work together with Mozambique public institutions to improve infrastructures and facilities • Contribute to increase energy regulation and laws in the country • Continuously update and assess the main political and economic activities in the country
- 6. Applying Impact investing principles to this project • Pursues both goals: financial return and social/environmental impact • Intentionally looks to generate, manage and measure impact, including environmental (reducing CO2) and social (energy for all, generating new jobs) • Aligned with the SDGs, particularly: • #7 (Affordable and clean energy) • #8 (Decent work and economic growth) • #12 (Responsible consumption and production) • Independent verification of the impact goals and consequent accomplishment
- 7. Thank you!