Mozambican power company EDM to invest US$382 million on linking rural areas to grid

26 June 2007

Maputo, Mozambique, 26 June – Mozambican state electricity company, EDM plans to set up 210,000 new links to the grid by 2009 and carry out investments of US$382 million, under the terms of a new program contract signed Friday in Maputo.

Of that amount, 30 percent will come from the company’s own reserves and the contract requires the government to support EDM in finding the remaining 70 percent of the funding.

Finance minister Manuel Chang, who signed the contract on behalf of the government, said that these new links would benefit around 1 million people, or approximately 5 percent of the country’s

Chang also said that the government would negotiate the payment of taxes due on importing equipment for rural electricity projects on a case by case basis and also negotiate a debt pardon with EDM.

The minister also called on the company to improve its commercial management and said that he would like to see greater attention paid to management of customers who owe the company money, including public bodies.

The company’s chairman, Manuel Cumbe said that implementing the program contract would depend heavily on a joint effort to put an end to theft of electrical cables that had reached alarming proportions over the last few weeks.

Mozambique’s electrification process is based on the power produced by the Cahora Bassa hydroelectric dam, which despite having a capacity of 14,000 megawatts, currently only generates 2,075 megawatts.

Most of the power produced is sold to South Africa and Zimbabwe under the terms of contracts signed before Mozambique’s independence, in 1975, and the country consumes just 5 percent of that power by re-buying it from South Africa at much higher market prices. (macauhub)