From Electrification to Development: FUNAE’s Vision for Rural Communities in Mozambique
The FUNAE - Energy Fund plays a central role in rural electrification in Mozambique, assuming an increasingly important responsibility in promoting universal access to energy, implementing mini-grids, and mobilizing financing for the energy sector.
In this interview, Mety Gondola, Chairman of FUNAE's Board of Directors, discusses the key milestones of the institution's ongoing transformation, the strategies being implemented to strengthen private sector participation, and FUNAE's vision for the future of rural electrification. He also highlights the role of PROMIR-MZ, the importance of the productive use of energy, and the contribution of mini-grids to the economic and social development of Mozambican communities.
FUNAE is undergoing a process of institutional transformation and strengthening its role in rural electrification. What have been the main milestones achieved so far, and what are the priorities for consolidating this transformation?
FUNAE is implementing a comprehensive institutional transformation process aimed at addressing the challenges of universal energy access and the evolving demands of Mozambique’s energy sector. This transformation seeks to position the institution for a stronger role in strategic planning, financial resource mobilisation and management, programme coordination, and the creation of enabling conditions for private sector participation in the development of sustainable energy solutions.
In this context, several institutional studies and assessments have been carried out to strengthen organisational and technical capacities, aligning professional competencies with energy market dynamics and the requirements of the energy transition. At the same time, FUNAE has been enhancing its capacity to mobilise climate finance, making significant progress in its accreditation process with the Green Climate Fund (GCF).
Additionally, the institution aims to consolidate the national framework for mini-grid development by promoting closer coordination between the Government, development partners, the private sector, and financial institutions, with the objective of creating a robust and sustainable ecosystem for rural electrification.
FUNAE’s strategic priority is now to consolidate the gains achieved through this institutional transformation, strengthen its role as a rural electrification fund manager, and accelerate the mobilisation of public and private investments that contribute to achieving the national target of universal energy access by 2030.
During RENMOZ 2026, you emphasised the need for greater private sector involvement. What strategies is FUNAE developing to mobilise this sector?
The private sector is a strategic partner of the Government of Mozambique in achieving universal energy access. This objective cannot be achieved through public resources alone; it requires the creation of a robust, predictable, and attractive market capable of mobilising private investment at scale.
Within this framework, FUNAE plays a central role in creating the necessary conditions to stimulate private sector participation. We are developing a pipeline of technically sound projects for mini-grid concessions and productive use of energy initiatives, establishing blended finance mechanisms, promoting risk-sharing models, and strengthening coordination with key sector stakeholders, including MIREME, ARENE, EDM, development partners, and financial institutions through the national coordination platform – the “Country Platform”.
Our vision is to ensure that the private sector participates actively across the entire off-grid electrification value chain, from the development, construction and operation of mini-grids to equipment supply, technological innovation, and the promotion of economic activities enabled by access to energy.
This strategy is already producing tangible results. A key milestone is the recent approval by the Government of Mozambique of the Universal Access Levy, a fundamental instrument for strengthening the sector’s financial sustainability. In parallel, USD 50 million in funding from the Green Climate Fund has been approved through the partnership between FUNAE and Enabel under the PURE Project, complemented by an additional EUR 20 million contribution from the European Union.
Other international partners continue to reinforce their commitment to the transformation of Mozambique’s energy sector. Sweden, through SNV, is providing approximately USD 11 million to strengthen institutional capacities, conduct functional analyses, and identify priority areas for the development of new off-grid energy generation and service delivery platforms. Germany, through KfW, is contributing approximately USD 23 million towards studies and the implementation of rural electrification projects.
Meanwhile, the World Bank has expanded its support through the +Energy Facility, contributing to an overall investment portfolio that could reach approximately USD 197 million.
Taken together, these investments reflect the confidence of national and international partners in FUNAE’s strategic vision and in the model we are implementing. More than simply mobilising financial resources, we are building a national platform capable of aligning public financing, private investment, and international cooperation to accelerate universal energy access and promote the sustainable economic and social development of Mozambican communities.
During RENMOZ 2026, FUNAE presented PROMIR-MZ. What distinguishes this programme from previous rural electrification approaches?
PROMIR-MZ represents a paradigm shift in rural electrification in Mozambique, establishing a structured approach for developing a sustainable mini-grid market. The programme was designed to combine public and private investment, development partner financing, an enabling regulatory environment, and financial instruments capable of mitigating investment risks in the sector.
The main differentiating factor of PROMIR-MZ lies in its integrated and multi-sectoral approach. The programme recognises that energy access alone is not sufficient to drive sustainable economic and social transformation. Mini-grids are conceived as local development platforms capable of stimulating economic activity, creating jobs, generating income, and improving the delivery of essential services to communities.
In this context, the programme promotes strategic coordination with key sectors of the economy, including agriculture, fisheries, industry, tourism, and commerce, with the objective of fostering productive use of energy, stimulating local economies, and strengthening the financial sustainability of energy infrastructure.
For private investors, mini-grid operators, and financial institutions, PROMIR-MZ provides a structured portfolio of investment opportunities supported by a carefully selected project pipeline, innovative financing mechanisms, more predictable processes, and stronger institutional coordination.
In this way, PROMIR-MZ positions itself as a national platform for investment mobilisation and inclusive economic development, helping to accelerate universal energy access and the sustainable transformation of Mozambique’s rural areas.
PROMIR-MZ foresees a significant expansion of mini-grids in Mozambique. How does FUNAE ensure that this expansion is technically viable, economically sustainable, and socially transformative?
Site selection results from a joint planning process involving several institutions and a technical methodology that goes far beyond simple geographical location. Factors analysed include population density, current and future energy demand, potential for productive use of electricity, limitations in the expansion of the national electricity grid, project economic viability, as well as environmental and social impacts.
The objective is to ensure that each investment maximises economic and social benefits for beneficiary communities while guaranteeing the long-term technical, financial, and operational sustainability of mini-grids.
To date, 363 potential sites have been identified for mini-grid development, and preparatory processes are underway for the launch of the respective concession tenders. These projects constitute a fundamental component of the national strategy to expand energy access in rural and remote areas of the country.
In the areas where FUNAE deploys mini-grids, how do they contribute to accelerating social transformation and development?
Energy is one of the main catalysts for socio-economic development. When a community gains access to reliable and sustainable energy, conditions are created to strengthen essential services, including schools, healthcare centres, water supply systems, public services, and digital transformation initiatives.
At the same time, access to energy stimulates local economic development by promoting the creation and expansion of small businesses, agro-processing activities, agricultural and fisheries product preservation, commerce, and service delivery, generating employment and income for local populations.
The impact of mini-grids goes far beyond the infrastructure installed or the number of connections made. Their true value lies in their ability to transform lives, stimulate local economies, and create opportunities that contribute to the sustainable improvement of living conditions in beneficiary communities.
FUNAE argues that the success of rural electrification should not be measured only by the number of connections. How can productive uses of energy drive community development?
Productive use of energy is one of the central pillars of FUNAE’s development strategy. Access to electricity must go beyond the simple provision of a basic service and translate into income generation, job creation, and the stimulation of local economies. It is this transformation that ensures the sustainability of investments and maximises their benefits for communities.
The programmes being implemented seek to stimulate productive activities in agriculture, fisheries, agro-processing, commerce, services, and small rural industries. Access to energy creates the conditions to increase productivity, improve product preservation, add value to local production, and expand business opportunities.
When used to produce, preserve, process, and commercialise goods and services, energy ceases to be merely supporting infrastructure and becomes a true driver of economic and social development, promoting inclusion, strengthening livelihoods, and improving quality of life.
The signing of the Subsidiary Agreement between FUNAE and Enabel was one of the highlights of RENMOZ 2026. What is the significance of this partnership?
The signing of the Subsidiary Agreement marks the beginning of PURE implementation and represents much more than the provision of financial resources. It is a clear demonstration of the confidence that international partners have in FUNAE’s institutional capacity to design, coordinate, and implement large-scale programmes with a direct impact on improving the living conditions of communities.
This initiative will accelerate the expansion of energy access through mini-grids, strengthen rural electrification, promote productive uses of energy, and create new opportunities for private sector investment and participation.
At the same time, this investment confirms international recognition of Mozambique’s potential to mobilise additional resources and consolidate a new generation of rural electrification programmes based on sustainability, innovation, inclusion, and strategic partnerships.
PURE therefore constitutes an important step towards achieving the country’s universal energy access objectives, contributing to local economic development, job creation, and the sustainable transformation of rural communities.
Looking ahead to the next ten years, what is FUNAE’s vision for the future of rural electrification, and what legacy does it aim to leave for Mozambican communities?
Our vision for the next ten years goes far beyond expanding energy infrastructure. We aim to consolidate a development model in which energy serves as a genuine instrument of economic and social transformation, capable of generating opportunities, reducing inequalities, and improving people’s quality of life.
We want every electrified community to have the conditions necessary to increase production, create jobs, develop small businesses, strengthen health and education services, and provide better prospects for future generations.
Along this journey, FUNAE will continue to play a strategic role in implementing public policies aimed at universal energy access, promoting innovative solutions, mobilising national and international financing, and strengthening partnerships with the private sector and development partners.
Our commitment is to contribute to building a more inclusive, sustainable, and resilient energy system, where no community is left behind and where energy serves as a true engine of development.
Through energy, we create the conditions to combat poverty, stimulate local economies, promote social inclusion, and build a more prosperous future for Mozambique.