Cahora Bassa transfer process to be concluded this year, Mozambique says

31 October 2007

Maputo, Mozambique, 31 Oct – Mozambique Tuesday informed Portugal that the conditions were set up to conclude the process of changing the shareholder structure of the Cahora Bassa Hydroelectric Dam (HCD), Mozambican daily Notícias reported.

The paper said that the agreement signed between the two countries outlined that by October 31, 2007 Mozambique had to notify Portugal that the deal could be concluded by the end of the year.

“Via a process of international consultation (…) the Calyon/BPI consortium was chosen for the structuring and setting up of financing for reverting HCB back within the deadlines set in the abovementioned agreements,” said a statement from Mozambican president, Armando Guebuza.

After its selection the consortium started an internal assessment of HCB, from a technical, financial and legal point of view, including customer consultations, namely Electricidade de Moçambique (ECM), South Africa’s Eskom, Zimbabwe’s ZEZA and the Southern African Power Pool, as well as the World Bank.

“As a result of this assessment and other activities carried out as part of the structuring and setting up of the loan, the Calyon/BPI consortium formally notified the Government, on October 26 of its decision to provide the amount to be paid to Portugal by December 31 of the current year, as set out in the agreements,” the message from the President said.

Under the terms of the deal signed on October 31 in Maputo by Portuguese prime minister José Sócrates and Mozambique’s president, Armando Guebuza, Mozambique will have to pay US$950 million for a 67 percent stake in HCB.

This means that the remaining US$700 million must be paid by December 31.

After the final payment, Mozambique will have an 85 percent share of HCB (as compared with the current 18 percent), with Portugal keeping a 15 percent stake (as compared with 82 percent), with a commitment from Portugal to sell of five percent of its shares to a buyer approved by Mozambique. (macauhub)