HomeOpinion PiecesMetering opportunities in Mozambique

Metering opportunities in Mozambique

The national electricity utility Electricidade de Mozambique (EDM), as a parastatal, suffers from many operational problems which have led to its current financial challenges. Chief of these is the increased cost of meter reading and the utility’s inability to efficiently collect revenues from its 250,000 customer base. A pilot programme of about 5,000 prepayment meters seems to have passed the test, and the utility has obtained funding from the World Bank to install a substantial base of prepayment or fixed rate meters. Fixed rate meters may be the best alternative for such a low customer base, where the costly support equipment for prepaid meters is not needed. A fixed rate meter is the intelligent equivalent of a load limiter, with the major difference that the consumer can accumulate energy for use in the future.

Complementing the commercial focus by EDM to attend to efficient revenue collection, the government is in the process of making CNELEC, the electricity regulatory arm of the Ministry of Energy, operational. CNELEC’s initial task will be to address the thorny issue of tariffs and attending to associated customer complaints. Allowing a professional entity as opposed to politicians to tackle these issues should give confidence to both consumers and investors. The combination of a focus on revenue collection and the setting of retail tariffs should enable EDM – or any other players allowed to participate in the supply industry in Mozambique – to achieve the electrification targets set by the government.

Mozambique is blessed with tremendous hydro-electric potential on the Zambezi River (about 3,000 MW), gas potential (about 800 MW) and coal (1,000 MW). The Mozal aluminium smelter in Mozambique requires an additional 610 MW in the next few years, titanium extraction requires up to 380 MW and EDM itself an additional 500 MW, all of which can be made available from local resources. To know how much is being produced and how much is being consumed will require multi-quadrant meters with remote communications facilities.

The potential for metering is quite substantial as the country continues to enjoy peace, stability and economic growth (which has been at about 8% per annum). Moving from an electrification rate of 6% to 20% is expected to require about US$800 million investment in infrastructure.