Mozambique to keep to deadlines to pay Cahora Bassa debt to Portugal

7 March 2007

Maputo, Mozambique, 7 March –Mozambique’s minister for industry, Salvador Namburete, has said that the government will respect the deadlines set for payment of US$700 million to Portugal for the change to the shareholder structure of the Cahora Bassa Hydroelectric dam (HCB).

Cited by Mediafax, Namburete said that the government was waiting for replies to the invitations it made to several financial institutions to obtain the necessary funding to pay Portugal for 67 percent of HCB’s shares.

Under the terms of the deal signed last October, Mozambique will only own 85 percent of shares in HCB and Portugal the remaining 15 percent, of which it will have to sell 5 percent to a partner chosen by Mozambique.

In order to buy the shares, Mozambique would have to pay Portugal US$950 million, of which US$250 million have already been paid, of a total debt estimated by the Portuguese authorities of US$2.5 billion.

Mediafax reported that the Mozambican government planned to get a loaned based on HCB’s future revenues.

The US$700 million are due to be paid this year although due to “exceptional circumstances” the deadline may be increased until June 30, 2008, as long as 50 percent of the debt is paid in 2007.