Mozambique is cooking with gas

Recent changes to energy laws, coupled with significant gas discoveries, the government’s commitment to bringing electricity to the entire population, and an openness to foreign investment, have transformed Mozambique’s energy market, says Pedro Couto.

“There’s been a lot of change in the last ten years, and it starts with government policies which shifted from a state-down relationship to new energy laws focused on energy transition and welcoming private investment,” explained Couto, chairman of leading Mozambique law firm Couto Graça & Associados, which has recently become part of the CMS Legal network.

“There is a lot of investment, a lot of new renewable projects, a lot of things going on with some online already and others still in the pipeline. It’s been a really active market.”

Investors should consider Mozambique “open for business”, commented Couto, noting how far the country has come since he began as a lawyer 25 years ago. He says the government has made “a massive effort” to encourage businesses, reforming laws that trace back to colonial times, and introducing modern and workable commercial codes, contract laws, energy- and water laws.

“We are in a new beginning,” Couto said. “There are huge discoveries of gas which, while not renewable, is a transitional energy that’s here and available. There are significant projects including Mphanda Nkuwa, a 1 500MW new hydro power project, and a new 450MW gas plant, which is incorporated with building new transmission lines of almost 600km, all looking to serve southern Africa.”

South Africa is in an energy crisis, but Mozambique has water, sun, wind, and gas, says Couto, so there are many elements that stakeholders are seeing as opportunities to really grow and start building into a bigger role in the local and regional energy market.

Couto would like to see more regional cooperation across Mozambique, South Africa, Zimbabwe, Tanzania and Malawi, with governments working together to simplify things.

While there are challenges, including infrastructure that needs upgrading and historic prejudices which need to be overcome, along with (mis)perceived political or other risks which can make projects more expensive, overall it’s a very exciting time for the Mozambique energy market, says Couto.

It’s also an exciting time for his firm, which brings further expertise and local knowledge to global giant CMS, which has over 4 800 lawyers working in more than 40 countries.

“CMS has quality everywhere they are,” said Couto, noting the advantage of having a network across Europe, Asia and Africa which provides foreign investors with top lawyers both in their home country and high quality “boots on the ground” in countries where they are investing.

“When you come to invest, you need to know the country, the laws, the people and how to navigate what you need to do. You can’t make any project without good lawyers,” Couto commented

He believes the region is at an important turning point. “Mozambique is looking very good with all the resources that it’s got available, and I think the challenge is going to be making sure we attract the right investment, the good investments, to make it work.”

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