Consultancy Services Contract for the Development of the Strategic Plan of the Energy Regulatory Authority (ARENE)

CONTEXT

The Mozambican power sector has recently experienced relevant changes that have opened the market to private agents, while the dominant role of EdM is still maintained (single buyer, supply, T&D operation). However, EDM faces significant financial challenges due to large investment requirements (universal access to power by 2030), the low level of final tariffs, and poor management of the grid (losses).

The country has been able to mobilize a large amount of soft credits and grants in the last years, devoted to the development of the power sector. According to EDM data, total loans devoted to transmission expansion, new power stations, new interconnections and electrification of rural areas amounted to 1,086 MUSD.3

Besides new infrastructure, the power sector is undergoing significant governance reforms, with the creation of the new regulator (ARENE) and the issuance of a series of studies and strategies that will help to align the development of the sector (National Electrification Strategy, Integrated Master Plan, Cost of Supply Study, Asset Audit and revaluation).

The Integrated Electricity Master Plan, developed by the Japanese International Cooperation Agency in cooperation with EDM and MIREME, establishes the development pace for power infrastructure for the 2018-2042 period. However, this masterplan shall be periodically updated (on a yearly basis, to capture sector dynamics, macroeconomic changes and new opportunities identified).

OBJECTIVES

The main objectives of these project were to:

• Help define strategic guidelines for ARENE, taking into account the mandate of the current Board of Directors, and
• Help to define a roadmap of strategic initiatives, based on the strategic vision of ARENE

DESCRIPTION

ARENE is the energy regulator in Mozambique, with the objective of supervising and regulating the energy sector in the country, in accordance with its organic statute. ARENE was created in 2017, however, its statutes were only published in 2019, making ARENE a relatively recent entity. Currently, ARENE faces important challenges in i) developing its activities and ii) in consolidating its role in the energy sector.

Additionally, the energy sector in Mozambique is going through a period of profound transformation and requires strong actions from the regulator to support the pursuit of the objectives (and government targets) of expansion and sustainability of the sector.

ARENE needs to have a clear vision of the actions to be taken in the current regulatory period (2021-2025) and have a clear agenda to guide its actions in the medium term. The main objective of this project is, therefore, to develop ARENE’s strategic guidelines until 2025, based on ARENE’s current strategic vision to develop a roadmap of initiatives, taking into account the existing conditions in the country to ensure the effectiveness and sustainability of actions. of ARENE in the coming years.

SUMMARY OF SERVICES

• • ARENE’s Situational Context Analysis
  • Energy Sector Assessment & Stakeholder Mapping
  • ARENE Internal Diagnosis
  • International Benchmarking
  • Mission & Values Definition
  • Functional, Organizational and Leadership Structure
  • Monitoring and Reporting Framework
  • Legal Implications Detail
  • Risk Analysis
  • Governance & Organizational Detail
  • Sustainability Plan
  • Roadmap for Implementing the Strategic Plan
  • Results Dissemination