UN Sustainable Development Goal (SDG) 7 states that access to affordable, reliable, sustainable, and modern energy should be provided for all by 2030. Mozambique is one of the poorest countries on earth but has abundant supply of energy resources. The electrification rate, however, has been slow. Rural electrification is hampered by lack of basic infrastructure, institutional barriers, and low ability and willingness to pay for energy services. Thus, there is a general gap between electricity supply and demand. In view of this, the present paper investigates supply and demand of electricity for a typical rural case study area in Mozambique. We suggest a nexus approach to improve water, energy, and food security initiated at a local level. Households in the investigated case study area can be connected to a mini-grid hydropower system that allows for energy production to 80–200 households. To increase the economic profitability of the mini-grid hydropower system we suggest including small-scale industry. For the studied rural village, this would be constituted by a small-scale factory for milling of corn and other cereals. Electricity produced can thus be used for food processing but also for pumping water supply to households for domestic use and small-scale irrigated farming lots. The results indicate that the villagers have a real payment capacity of between 8 and 19 USD per MWh of generated hydropower. Benefits of rural electrification are direct. It contributes to improved living conditions for households and provides better nexus security and sustainable development within healthcare, education, and small-scale business development.
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