China’s Export-Import Bank (Eximbank) will invest US$2.3 billion in the construction of the 1,300-MW Mphanda Nkuwa hydroelectric project on Mozambique’s Zambezi River, officials said.
“The government has signed a memorandum of understanding with Eximbank on the financing arrangements,” an official in Energy Minister Salvador Namburete’s office said May 10. “A decision on the commencement of the project is dependent on agreeing all terms after a technical audit by the bank, and talks with potential consumers of the electricity such as mining companies and South Africa’s power utility Eskom.”
Specific funding details, such as interest rate and period for repayment, were yet to be worked out, the official said.
Mozambique is pressing for construction to begin in late 2006, the official said. Mphanda Nkuwa, formerly called Mepanda Uncua, is expected to go on line in 2010 or 2011, according to Energy Ministry estimates. The project is 70 kilometers south of the 2,040-MW Cahora Bassa hydro project.
The official said the memorandum of understanding with Eximbank also provides for the bank to fund construction of the US$300 million Moamba-Major Dam in Maputo Province, which will provide drinking water for residents.