IMF again commends Mozambique for 2,040-MW Cahora Bassa deal

The International Monetary Fund (IMF) has released another US$2.4 million loan to Mozambique, again complimenting the African nation for its handling of the acquisition of 2,040-MW Cahora Bassa Dam from Portugal.

The release June 18 of the US$2.4 million brings to about US$17 million the total disbursements to Mozambique under IMF’s Poverty Reduction and Growth Facility arrangement for the southern Africa nation. IMF released a similar amount a year ago. (HNN 6/28/06)

Deputy Managing Director Takatoshi Kato again complimented Mozambique’s strong macroeconomic performance and singled out an agreement in which Portugal is to transfer to its former colony 85 percent of Hidroelectrica de Cahora Bassa (HCB), operator of the Cahora Bassa project on the Zambezi River.

“Good progress has been made in seeking financing for the transfer of majority ownership of the Cahora Bassa hydropower plant from Portugal to Mozambique,� Kato said. �The authorities reiterated their commitment to non-recourse financing so not to increase the government’s liabilities to commercial creditors, and ensure transparency and accountability.�

In May, two European banks agreed to lend Mozambique US$700 million so it can pay off the debt to Portugal and take the majority stake in Cahora Bassa. (HNN 5/24/07) France’s Calyon Bank and Portugal’s BPI won bidding to lend Mozambique the money. The Franco-Portuguese consortium also was expected to assist with other major infrastructure projects in future.

Officials say Cahora Bassa has the potential to produce 14,000 MW. Its existing capacity is sold 60 percent to South Africa and 40 percent to Zimbabwe under contracts adopted before independence.

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