Eduardo Mondlane University (UEM) is in the process of modernizing its teaching and learning approaches. As one of the pedagogical reform projects, student-centred learning (SCL) in combination with web 2.0 tools was introduced as a pilot in the course 'ICT in Environmental Education' in the Faculty of Education. This study explored--using action research strategy--to what extent the new pedagogical approach contributed to students' competency development. Twenty-nine students were involved in the course, eight semi-structured interviews with students were combined with sixteen classroom observations and 8 weeks how students used the Learning Management System (LMS) and web 2.0 tools. Results showed that collaborative E-learning supported the development of students' information management and problem solving skills as well as their metacognitive strategies for self-regulated learning. ICT supported problem based learning contributed to an increased intrinsic motivation. However, not all students were ready to adopt an active role. At the start they looked upon teaching as a one-way knowledge transfer. This study recommends that E-learning initiatives in Mozambique should always go together with an ICT literacy course and training in 21st-century learning skills.