Portuguese prime minister to sign Cahora Bassa agreement in Mozambique

20 March 2006

Lisbon, Portugal, 20 March – Portugal’s prime minister, José Sócrates, is planning to visit Mozambique “very soon” to sign a final agreement on the Cahora Bassa hydroelectric dam, Finance Minister Fernando Teixeira dos Santos said Friday in Lisbon.

The announcement on the end of technical negotiations was made Friday, in Maputo by the Portugal’s secretary of state for Finance, Carlos Costa Pina, and by Mozambique’s Energy minister, Salvador Namburete.

Setting the date for the final agreement will depend on the availability of the Mozambican president, Armando Guebuza, and Portugal’s prime minister, Namburete said.

The agreement will invert Mozambique and Portugal’s stakeholder positions in the Cahora Bassa dam, which is the Portuguese state’s largest overseas project.

Mozambique’s stake will change from 18 percent to 85 percent of Cahora Bassa while Portugal’s stake will be reduced from 82 percent to 15 percent.

Based on a memorandum signed at the end of 2005, the Mozambique government may request that the Lisbon government hand over a further 5 percent of the project´s capital.

The Mozambican government is expected to pay Portugal 787.4 million euros in exchange for the construction and maintenance of the dam, which was built during Portugal’s colonization of Mozambique, which ended in 1975 with the country’s independence. (macauhub)