In recent years, Mozambique has been consolidating its position as one of the most dynamic markets in the SADC (Southern African Development Community) region. Driven by sustained economic growth, vast natural resources and reforms aimed at facilitating foreign investment, the country is emerging as an attractive destination for entrepreneurs and large corporations. Sectors such as agriculture, mining, tourism, construction and information technology are booming, creating an environment of opportunities for new investors. However, it is in the energy sector that Mozambique stands out as a true rising power.
Business opportunities in Mozambique
Opportunities and Challenges in the Energy Sector in Mozambique
Mozambique currently holds one of the most diverse energy reserves on the African continent. Between natural gas, coal, hydroelectric potential and renewable energy, the country has a solid base for energy generation and export. Ongoing megaprojects, led by multinationals such as TotalEnergies, ExxonMobil and Eni, have put Mozambique on the radar of major global investors. However, despite its potential, the sector faces structural challenges, including a limited electricity grid, political instability in certain regions and bureaucracy in licensing new projects. Even so, the opportunities outweigh the obstacles, making the country a promising destination for energy investments.
Natural Gas as a Catalyst for the New Mozambican Economy
The discovery of significant natural gas reserves in the Rovuma Basin in the northern province of Cabo Delgado has positioned Mozambique as a major player in the global liquefied natural gas (LNG) industry. With reserves exceeding 200 trillion cubic feet, the country is poised to become the world’s third-largest LNG exporter. The projects by TotalEnergies and ExxonMobil/Eni, valued at more than $45 billion, represent an opportunity not only for large investors but also for small and medium-sized companies that can provide support services such as transportation, maintenance and logistics. However, instability in Cabo Delgado province has posed additional challenges, requiring security solutions and collaboration with the government to ensure the continuity of investments.
Opportunities in Hydropower
Mozambique is one of the African countries with the greatest hydropower potential. The Zambezi River, in particular, is one of the country’s major energy assets. The Cahora Bassa Hydroelectric Power Plant, with a capacity of 2,075 MW, supplies power to Mozambique and neighbouring countries such as South Africa, Malawi and Zimbabwe, but there is still untapped potential. The government has plans to develop the Mphanda Nkuwa hydroelectric project, with an estimated capacity of 1,500 MW, thus creating new opportunities for investors interested in public-private partnerships.
Bet on Renewable Energies
With a sparse electrification network, renewable energy has emerged as a viable alternative to expand access to electricity, especially in rural areas. The Mozambican government has been actively promoting investments in solar and wind projects, taking advantage of the more than 300 days of sunshine per year and the favorable winds along the coast. National and foreign companies are already developing solar photovoltaic parks, especially in the north and center, contributing to the diversification of the country’s energy matrix. In addition, mini-grid and off-grid projects are receiving government incentives, opening doors for investors who want to provide sustainable solutions for remote communities.
Electrification and Energy Infrastructure
Despite Mozambique’s high generation potential, its transmission grid is still limited. The country faces challenges in interconnecting its three main electricity grids (north, center and south), which results in recurring power outages. To overcome this challenge, the government is implementing an ambitious Integrated Energy Infrastructure Master Plan, which foresees the development of new transmission and distribution lines. This effort creates new opportunities for investments in electricity infrastructure, supply of control equipment and solutions to improve the quality of distributed energy.
As we can see, the Mozambican energy sector represents one of the most promising markets on the African continent. With vast reserves of natural gas, untapped hydroelectric potential and ideal conditions for the growth of renewable energy, Mozambique offers a diverse range of opportunities for investors of all sizes. In addition to the favorable economic environment, the country has a growing market, a competitive tax regime and incentives for new businesses. The infrastructure, although still developing, can be modernized, and the availability of qualified labor reinforces the attractiveness of investment. Despite regulatory and, above all, security challenges, the growing international interest and the government’s commitment to facilitating business consolidate Mozambique as a strategic destination for those seeking expansion in a sector vital for the future.
