China’s Exim Bank to finance Cahora Bassa Dam’s debt to Portugal

8 May 2006

Maputo, Mozambique, 08 May – The China Export-Import Bank (Exim Bank) is to finance the payment of Mozambique’s Cahora Bassa Hydroelectric Dam (HCD) debt to Portugal, to the value of US$750 million, Mozambican newspaper Savana reported.

The payment of the debt to Portugal is in exchange for the country handing over control of the largest dam in Soutehrn Africa to Mozambique, which will have an 85 percent share in HCB, and have the Portuguese state as a “strategic partner” retaining 15 percent, in line with the memorandum of understanding signed between the two countries at the end of last year.

Mozambique’s prime minister, Luísa Diogo, recently said in Parliament that the country had found financing for the second tranche of HCB’s debt to Portugal.

The agreement outlines that HCB will pay Portugal, after signing, US$250 million, and the remaining US$750 million over the next few years.

Exim Bank will also finance the construction of the Mpanka Nkua hydroelectric dam which will be located 60 kilometers downstream of Cahora Bassa, in the Zambezi River valley, according to the two countries.

The loan, which totals US$2.3 billion, will also finance the construction of a power transmission line between Tete and Maputo, a distance over 1,540 kilometers. (macauhub)