MOZAMBIQUE- The Japanese government is to grant Mozambique a loan of 17.27 billion yen (167 million US dollars) to build a gas fired power station in Maputo.

The agreement was signed on Monday by Deputy Finance Minister Pedro Couto and the head of the Japanese International Cooperation Agency (JICA), Katuyosho Sudo.

The loan will be used for engineering services, the acquisition of equipment, construction work and professional training.

The station will be a combined cycle power plant. Such plants are much more efficient than conventional power stations, using two heat engines in tandem to convert a higher fraction of the heat produced by the fuel into electricity. Combined cycle plants also produce less carbon dioxide, and hence have a lower impact on climate change, than older technologies.

On average, according to a recent scientific study, coal fired power plants emit 915 grams of carbon dioxide for every kilowatt-hour of electricity produced. For standard natural gas fired plants, the figure is 549 grams per kilowatt-hour, but for combined cycle plants, it falls to 436 grams per kilowatt-hour.

The new power station will be built on the site where SONEFE once stood - this was a coal and oil fired power station that was a vital back up source of electricity for Maputo during the war of destabilisation when the transmission lines from South Africa were regularly sabotaged by the Renamo rebels. SONEFE was decommissioned shortly after the end of the war.

The combined cycle power plant will generate 100 megawatts, which is rather less than a third of Maputo's current electricity consumption. Work on the new station should be complete by 2018.

“The project will improve the stability of the electricity grid in general”, said Couto. “It is also a response to the growing demand for the domestic use of power”.

Sudo said that the available projections show that the demand for electricity in southern Mozambique will continue to grow at an annual average rate of 18 per cent for the next five years.

The chairperson of the board of Mozambique's public electricity company, EDM, Augusto Fernando, said that he expected considerable improvement in electricity supply resulting from the new power station.

He said that, with the increase of 100 megawatts, EDM could, in the event of any breakdown in the transmission lines which supply the south of the country, generate power for essential services. A gas fired power station would “improve balance in terms of supply”