The governments of Mozambique and Portugal have signed an agreement to create a fund to support investments in clean energy projects in Mozambique.
The official Agencia de Informacao de Mocambique (AIM) said Portugal pledged to raise US$124 million for the fund, which corresponds to an additional final payment Mozambique was required to make to Portugal in order to take ownership of the 2,040-MW Cahora Bassa hydroelectric project on the Zambezi River.
With funding from French and Portuguese banks, Mozambique paid a US$700 million debt in 2007 to its former colonial master to win control of Cahora Bassa. (HNN 11/28/07) However, AIM reported Mozambique was required to pay another US$124 million to compensate Portugal for financial restructuring of project operator Hidroelectrica de Cahora Bassa (HCB).
Mozambique Energy Minister Salvador Namburete said the US$124 million investment is the result of a commitment by Portugal during negotiations over HCB.
Namburete said the fund, to be administered by Sociedade Financeira de Appio ao Desenvolvimento (SOFID), will be invested in clean energy projects that contribute to reducing the effects of climate change.
HCB Chief Executive Officer Paulo Muxanga said in June that Mozambique plans to invest 80 million euros (US$123.5 million) next year to refurbish Cahora Bassa. (HNN 6/4/08) Muxanga said a tender would be launched in coming months for studies of problems at the Zambezi River power plant, which HCB says has a potential capacity of 14,000 MW.