Mozambique’s electricity production fell by 25% in 2025 to 14.4 million MWh as record low rainfall in the Zambezi Basin reduced water availability at the 2,075 MW Caora Bassa hydropower plant and other major reservoirs. Hydroelectric power generation fell 30.7% year-on-year, causing energy shortages and price disputes, forcing Mozambique’s largest industrial project, Mozal, to go into nursing care from March 15th.
This decline reinforces the need for a more balanced and resilient energy mix in Mozambique, while highlighting the increasing impact of climate change on hydropower systems. With one of Africa’s largest natural gas portfolios and a growing pipeline of LNG and gas-to-power projects, this disruption presents an opportunity to leverage gas not only for export, but also to strengthen domestic power security, support industry and foster long-term growth.
Why gas must become a bridge fuel
Mozambique’s power shock in 2025 shows how hydropower’s dominance can be a strength until climate change becomes a concentrated risk. When water is available, hydropower provides a low-cost baseload, but gas can provide flexibility that hydropower loses in drought years.
On the back of an estimated 150 billion cubic meters of proven natural gas reserves, Mozambique is leveraging one of Africa’s largest gas funds to drive a growing portfolio of LNG projects. Energy giant Eni’s Coral South FLNG has been in operation since 2022 and has a liquefaction capacity of 3.4 million tonnes per year (mtpa), marking Mozambique’s entry into the global LNG market. By the end of 2025, the floating facility had produced 9.49 million tons of LNG and shipped 127 cargoes, demonstrating both operational momentum and export reliability.
Based on its success, Coral Norte FLNG is moving towards final investment decision with approval expected in 2025 and production capacity of 3.55 million tonnes per year from 2028. The $7.2 billion project is projected to generate approximately $23 billion in fiscal revenue over 30 years. Onshore, TotalEnergies’ Mozambique LNG was relaunched in early 2026 after a lengthy force majeure period. Planned production is approximately 13 million tons per year, with the first LNG expected to be produced by 2029.
How can Mozambique secure gas molecules for domestic consumption?
For many years, domestic gas has been concentrated in the Pande and Temane fields in the south. These areas supply more than 30 companies in Inhambane, Gaza and Maputo, including industrial users such as Mozal and Gigawatt. However, the domestic market remains geographically small and underdeveloped compared to the scale of export LNG projects in the north. In late 2025, the government granted 30-year concessions to state-owned companies, including state-owned oil companies, state-owned energy companies, and hydropower producers, to handle LNG and develop gas transportation infrastructure. The concession is concentrated in Beira and Inhassoro, with an FSRU system and a link to the ROMPCO pipeline.
Under Mozambique’s oil framework, 25% of oil and gas production must be allocated to the domestic market. From a domestic content perspective, Coral Norte is a step forward. Once approved, the government explicitly mandated that 25% of total gas production be set aside for local use to support industrial development, and that 100% of condensate be designated for power generation.
Mozambique has built important legal and contractual foundations by providing supply through domestic gas allocations and projects such as Coral Norte. Gas is available, but the next challenge is to build the necessary infrastructure, such as power plants and grids, to turn stored gas into reliable electricity and reduce dependence on hydropower.
