OKYO, Japanese conglomerate Sumitomo will finance the expansion of the gas-fired power station in Temane, in the southern Mozambican province of Inhambane.

A contract was signed in Tokyo on Wednesday between Sumitomo and the Mozambican electricity distribution company, EDM, under which Sumitomo pledged to invest 190 million US dollars. The expansion will raise the generating capacity of the power station from 15 megawatts (MW) to 110 MW, greatly increasing its capacity to sell power to southern and central Mozambique.

EDM Chairperson Mateus Magala declared that “the next steps are to conclude the financing through the Japanese banking system, on preferential terms, and also to ensure that the contract on supplying the gas is signed by ENH (Mozambique’s National Hydrocarbon Company)”.

Magala guaranteed that after the work on the power station is complete, the quality of the electricity supplied to the southern and central provinces of the country will improve considerably, since Temane will be able to transmit power to Beira, the nearby town of Dondo and to Manca province.

“When we produce electricity, we look at the regional context. The greatest amount is to meet our own requirements, and any surplus is for neighbouring countries, and to allow us to earn foreign currency allowing us to continue making other investments,” he added.

Sumitomo is already involved in the Mozambican energy sector as the company is building a new gas-fired power station in the capital, Maputo.