Mozambique has among the lowest levels of modern energy consumption per capita globally. With a population of around 34 million, the country faces lingering development challenges, including a high poverty rate and reliance on subsistence agriculture. Despite progress over the past twenty years, only 48% of Mozambicans had access to electricity in 2022. Bioenergy, mainly wood and charcoal, dominates the energy mix, with nearly 95% of the population relying on traditional fuels for cooking.

Yet, Mozambique is endowed with significant untapped energy resources – including hydropower, natural gas, solar, and minerals – which could help close this gap and catalyse industrial development. Leveraging these resources to build a modern and inclusive energy system is the focus of the country’s Energy Transition Strategy (Estratégia de Transição Energética, ETE), approved by the government in 2023. The ETE aims to leverage the country’s renewable and natural resources to expand energy access, drive economic growth through low-emissions industrialisation, and position Mozambique as a regional energy hub.

Strengthening institutions and regulatory frameworks, improving governance and transparency, and enhancing data management and planning tools will be essential for Mozambique to realise its full potential.

Access to modern energy is the cornerstone of Mozambique's ETE, with the target of achieving universal electricity and clean cooking access by 2030. More than half of Mozambicans still lacked access to electricity in 2022. The rate of clean cooking access is even lower, with only 7% of the population relying on clean cooking solutions. The disparity between urban and rural areas is stark with 76% and 16% of the urban population having access to electricity and clean cooking, respectively. These figures drop to 15% and 1% in rural regions.

Mozambique aims to extend electricity supply through a mix of grid-connections, mini-grids, and solar home systems, and cleaner cooking through liquified petroleum gas (LPG), improved biomass stoves, and electric cookers. This transition aims to improve living standards, promote small businesses, and mitigate the environmental and health impacts of traditional energy use.

The rate of electricity access has been accelerating, with the number of connections rising by over 50%, from around 8.2 million in 2017 to 12.7 million in 2022. In contrast, clean cooking has progressed slowly, increasing by just 5 percentage points over 22 years (2000-2022), leaving 30 million people still reliant on traditional biomass.

The challenge is immense, due to Mozambique's predominantly rural, low-density demographics and high population growth. Low-income levels make the upfront costs of electricity and clean-cooking solutions prohibitive for many, limiting demand and complicating network expansion. In this context, off-grid electrification is expected to play a growing role, but further reforms, such as predictable tariffs, structured financing, and cohesive policies, are needed to attract investment and scale both electricity and clean cooking access. 

The 2022 Electricity Law expanded the participation of the private sector in the electricity value chain. So far, private investment has only occurred in generation, with independent power producers signing power purchase agreements with Electricidade de Moçambique (EDM), the state-owned utility that serves as the single buyer, system operator, and sole supplier in grid-connected areas.

Mozambique's total electricity generation is predominantly based on hydropower (83%), with the Cahora Bassa Hydroelectric (CBH) as the largest generation asset. However, over two-thirds of CBH’s output are exported to South Africa under a long-term contract due to end in 2030. Natural gas makes up 15% of electricity generation, partly provided by domestic gas production from the Pande and Temane projects.

With a solar irradiation level of 2 100 kWh/m²/year and estimated wind power potential of at least 4.5 GW, there is scope to significantly increase the role of variable renewables. Mozambique has launched competitive auction programmes, supported by development partners, to upscale the deployment of renewable energy. Several projects are under development, ranging from 15 to 120 MW, which could help reduce project costs and deliver lower tariffs for EDM. However, they have not yet led to the commissioning of new renewable capacity.

Mozambique does not yet have a single, unified grid across the country. While the central and northern grid contains most of Mozambique’s current and potential hydropower resources, the southern grid – which includes the capital city, Maputo – accounts for most of the country’s demand. Due to a lack of interconnections, the southern grid must import much of its power from South Africa, as does the Mozal aluminium plant, Mozambique’s largest consumer. A “Backbone” transmission project is under development, which aims to link the central-northern and southern systems. It is a complex initiative carried out in several phases, whose completion will be critical in shaping the country’s future import and export arrangements.

With some of Africa’s largest gas resources, of which the National Petroleum Institute estimates 3 766 billion cubic metres (bcm) to be recoverable, Mozambique’s ETE aims to provide gas to both national and international markets, to replace more polluting fuels such as coal and diesel. Domestically, priority is given to potential uses in power generation, as well as LPG and fertiliser production. Several natural gas projects are under development, which could increase the availability of gas for the domestic market and support industrial development, in line with Mozambique’s long-term strategy set out in the Natural Gas Master Plan.

Current production mostly comes from the Pande and Temane gas fields with 80% of the output being exported to South Africa via the ROMPCO pipeline, and the remaining 20% supplying the domestic market. Further developments in the Pande and Temane areas are expected to supply the planned 450-MW Central Térmica de Temane gas-fired power plant.

Other projects, primarily aimed at export markets, include Coral South LNG, which came online in late 2022 and is expected to further add significant capacity in the coming years. The development activities of the Mozambique LNG project were suspended by TotalEnergies in 2021, due to the increase in insurgent violence in the Cabo Delgado province but is now expected to resume by the end of 2025.

Most of the revenue for Mozambique from these projects is set to arrive in the mid-2030s at the earliest. The 2024 establishment of a Sovereign Wealth Fund could support a transparent and efficient management of future gas revenues by stabilising the state budget against volatility in petroleum revenues and ensuring the benefits of oil and gas resources for future generations.

Since 2018, coal has been Mozambique’s top export by value, surpassing aluminium and accounting for around one-third of the country’s export revenues. Coal production expanded significantly in the 2010s following the rehabilitation of key infrastructure, and reached 14.3 million tonnes (Mt) in 2022, primarily from Tete province.

Although coal is the country’s leading export, it contributes only marginally to its domestic energy supply (0.1%), with usage being largely confined to industry. While earlier government plans envisioned new coal-fired capacity, the ETE prioritised other generation lower cost options, such as renewables and natural gas, which contributes to a broader strategy to fulfil the country’s climate commitments and position itself competitively as a low-emissions export hub.

Mozambique’s energy intensity declined by 56% between 2000 and 2021. Despite this progress, the country remains the sixth most energy-intensive globally and the second highest in the Eastern and Southern Africa regions.

Significant energy efficiency efforts are required in the buildings sector, which relies heavily on bioenergy, driving Mozambique’s end-use energy consumption. Enhancing energy efficiency is an important objective for the government in this context, as it can play a crucial role in accelerating energy access and tempering energy intensity as demand grows. Other highly energy intensive sectors include transport whose demand, mostly for diesel and gasoline fuels, has increased nearly five-fold in the past 20 years driven by population growth, urbanisation and increasing rates of vehicle ownership.

According to the government, energy demand is expected to double between 2019 and 2027, partly due to significant efforts to improve electricity access. Adopting energy efficiency measures, such as Minimum Energy Performance Standards (MEPS) for key technologies, could save more than 2 000 GWh of electricity annually by 2030 and significantly reduce CO₂ emissions, with even greater savings possible through best available technologies. The government adopted its first energy efficiency strategy in 2023, with proposed measures for residential buildings, industry, and transport. 

Mozambique has contributed very little to greenhouse gas emissions (GHG) and in 2020 represented only 0.2% of global GHG emissions, despite being home to 0.4% of the world’s population. However, the country’s emissions are projected to increase due to population and economic growth, increased deforestation and rising industrialisation.

According to the country’s GHG inventory, energy is the second largest emitting sector after land-use, land use change and forestry. Within the energy sector, traditional use of biomass accounted for the largest share of emissions (39%), followed by the transport sector (35%), industry (13.5%) and electricity (12.5%).

Mozambique is a party to the United Nations Framework Convention on Climate Change (UNFCCC) and a signatory of the Kyoto Protocol and Paris Agreement. The country submitted its Intended Nationally Determined Contribution in 2015, its first Nationally Determined Contribution (NDC1) in 2018, and an updated NDC1 in 2021. The updated NDC1 aims to reduce emissions by about 40 million tonnes carbon dioxide equivalent (MtCO₂-eq) between 2020 and 2025 against its business-as-usual trajectory, requiring an estimated USD 7.6 billion investment. Efforts to increase data availability and consistency are key to monitor progress and support the revision and update of national targets.

Mozambique has also developed a comprehensive framework for climate resilience and adaptation. This includes the National Climate Change Adaptation and Mitigation Strategy and the National Adaptation Plan, which aim to enhance institutional capacity and access to resources for adaptation measures, such as strengthening co-ordination and early-warning systems. The Disaster Risk Reduction Master Plan further strengthens resilience to natural disasters. Additionally, Mozambique has developed 135 district-level climate adaptation plans, but these do not have funds for implementation as of 2025.

Mozambique faces significant challenges in attracting investment due to its high public debt levels, political instability, and a complex business environment. The government has relied heavily on development finance institutions (DFIs) for investments in its domestic energy sector, with private capital mostly flowing into the export-oriented fossil fuel supply sector.

Energy projects in Mozambique typically face a high cost of capital, which deters investors and limit the influx of necessary capital for development. Mozambique’s banking sector, despite having seen growth in recent years, remains too small to mobilise large-scale investment.

Political and regulatory risks further complicate the investment landscape. The aftermath of the 2016 ‘’hidden debt’’ crisis – whereby the government revealed previously undisclosed debts of more than USD 2 billion – and recent civil unrest have dampened investor confidence. Streamlined policies and fiscal support are needed to reduce perceived risks, enable viable business models, and expand access to affordable energy solutions.

Development finance remains crucial for Mozambique’s energy sector, with DFIs playing a key role in derisking private investments and providing necessary capital. Over the past decade, DFIs and other official development aid providers have disbursed around USD 2 billion towards Mozambique’s energy sector. However, the decline in commitments from DFIs and other official development aid providers in recent years suggests that future funding will be scarcer, emphasising the need for strategic allocation of concessional finance to maximise its catalytic effect. 

Mozambique has extensive mineral resources and several large-scale mines producing key minerals for the global clean-energy transition, notably bauxite and graphite. The country holds one of the world's largest graphite deposits, with estimated reserves of 25 million tonnes, primarily located in the northern Cabo Delgado province. Its bauxite reserves, estimated at more than 2 million tonnes, are situated in the northwest near the border with Zimbabwe in Manica province.

Mozambique has a policy and legal framework for mining, but institutional capacity is limited, and existing processes serve more as response mechanisms rather than as planning and development tools. While there is no policy with a focus on critical minerals, the ETE has identified the potential benefits of developing these resources.

Mining operations in Mozambique are subject to various taxes, including value-added tax (VAT), income tax, and industry-specific royalties. In 2023, the government allocated 10% of mining tax revenue to community and provincial development, of which 7.25% was for local projects and 2.75% for community support. However, Mozambique faces significant revenue losses due to tax avoidance in the extractive industries.

Currently, almost all mineral production is exported, although Mozambique is exploring the possibility of processing and refining these minerals locally to support socio-economic development. For instance, leveraging its bauxite resources – the primary ore for aluminium production – Mozambique produced around 565 000 tonnes of aluminium in 2021, making it one of the world's largest exporters of this metal. Raw aluminium is the country's second-largest export by value, after coal, with annual sales worth USD 2 billion. With many countries seeking to diversify their critical mineral supply chains for greater security and resilience, Mozambique has the opportunity to expand operations and add greater value locally.