Mozambique: Government to pay Cahora Bassa debt to Portugal this month

12 November 2007

Maputo, Mozambique, 12 Nov – The Mozambican government is to pay the US$700 million it owes to Portugal for the change in the shareholder structure of the Cahora Bassa Hydroelectric Dam (HCB) on November 26, weekly newspaper Savana reported Saturday in Maputo.

Under the terms of an agreement signed in Maputo on October 26, Mozambique will increase its stake in HCB from 18 to 85 percent, while Portugal will reduce its stake from 82 percent to 15 percent.

The funds required to acquire 67 percent of HCB are in the form of a loan to be granted by a consortium made up of French banks CA Lyon and Portugal’s BPI, which will be paid off with the sale of electricity produced at the hydroelectric plant.

The weekly said that the consortium had already opened a bank account where the revenues from the sale of the electricity can be deposited and the loan payments will also come out of this bank account.

The consortium, the paper said, gave the government three payment options – of 7, 12 and 15 years – and an agreed interest rate of 2 percentage points on Libor (London Interbank Offered Rate). (macauhub)