Mozambique’s energy minister says the government will meet a December deadline 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.
Portugal and its former colony signed a memorandum of understanding in December 2006 to give 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. Part of the agreement is for Mozambique to make payment to Portugal for building and maintaining the project. Portugal holds 82 percent of the project and Mozambique the rest.
The pact calls for the handover to be finished by the end of December, but the deadline can be extended to June 30, 2008, under exceptional circumstances, provided that Mozambique pays at least 50 per cent of the outstanding debt this year.
“There is nothing to worry about, we are going to meet the deadline as prescribed in contract.� Energy Minister Salvador Namburete said. �We believe that by the deadline we will be able to pay.�
Namburete said Mozambique already has paid US$250 million.
In May, two European banks, France’s Calyon Bank and Portugal’s BPI, agreed to lend Mozambique US$700 million so it could pay off the debt. (HNN 6/19/07) In June, the International Monetary Fund released a US$2.4 million loan to Mozambique, complimenting the African nation for its handling of the acquisition Cahora Bassa.
Mozambique plans to spend US$382 million during the next three years to upgrade its electricity system, with an eye to expanding Cahora Bassa. (HNN 6/26/07)
Namburete previously said Mozambique plans to begin selling electricity from Cahora Bassa to neighboring Malawi beginning in 2009. (HNN 9/13/07) The power plant currently supplies power to South Africa, Namibia, Botswana and Zimbabwe. (HNN 9/12/07)