Mozambique to buy hydro scheme from Portugal
Portugal is selling its 15 per cent stake in the Cahora Bassa hydroelectric dam, with Mozambique buying 7.5 per cent for almost €32 million, and the other 7.5 per cent going to Portuguese power supplier Redes Energeticas Nacionais (REN) which operates Portugal's national grid.
The deal, which was signed by Portugal's prime minister Pedro Passos Coelho and Mozambican president Aramando Guebuza in Maputo at the beginning of April, stipulates that REN must relinquish its share to Mozambique within two years.
In exchange for its stake in the dam, REN will assume shares in a company, yet to be established, that will operate a new electricity transmission line known as the CESUL (Centre-South), from the northern Tete province to Maputo.
The move is seen as part of Mozambique's ambitious plans to overhaul the national electric grid, including the construction of a second power station at Cahora Bassa and the laying of long-distance power lines connecting the coal fields in Tete province.
Until 2007 Portugal held 82 per cent of the shares, and Mozambique just 18 per cent. After extensive negotiations that year, most of Portugal's shares were sold to Mozambique for €532 million, leaving Mozambique with 85 per cent and Portugal 15 per cent.
The hydro power plant, which produces more than 2000 MW, is the largest in Mozambique and one of the largest in Africa. The facility only became profitable in 2010, three years after the construction of a line to South Africa, which buys 65% of the plant's output.
Portugal completed the dam on the Zambezi river in 1974, the same year that it left its former colony.