Banks ready to fund Mozambique debt for 2,040-MW Cahora Bassa

Mozambique announced that France’s Calyon Bank and Portugal’s BPI said they are ready to lend Mozambique the money to pay a US$700 million debt to Portugal in order to gain control of the 2,040-MW Cahora Bassa hydroelectric project on the Zambezi River.

“…The Calyon/BPI consortium formally notified the government of Mozambique, on October 26 of its decision to provide the amount to be paid to Portugal by December 31 of the current year, as set out in the agreements,” President Armando Guebuza said October 31.

In May, the two European banks, Calyon and BPI, agreed to lend Mozambique the US$700 million so it could pay off the debt.

Guebuza said the commitment ensures his country will meet a December deadline to pay the debt as outlined in a memorandum of understanding Mozambique and Portugal signed last December. (HNN 10/3/07) The deal gives Mozambique 85 percent of Cahora Bassa and Portugal 15 percent, to resolve a dispute over control of the project that has lasted since the early 1970s.

Mozambique news Internet site Canal de Mocambique reported Canadian utility Manitoba Hydro might take part in management of Cahora Bassa after the debt is paid. Citing sources close to the operation, Canal said contracting of the Canadian hydropower utility already is under way.

Manitoba’s international unit, Manitoba Hydro International, was commissioned by Nippon Koei of Japan in 2006 to serve as sub-consultant for a technical due diligence study for Cahora Bassa Dam, the hydropower plant, and a high-voltage direct current transmission scheme.

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