Mozambique: Cahora Bassa Hydroelectric dam has Mozambican company status

14 November 2007

Maputo, Mozambique, 14 Nov – The Cahora Bassa Hydroelectric Dam (HCB) has since Tuesday been made a Mozambican company after the Council of Ministers approved a decree altering the terms and conditions of the contract signed with Portugal on June 21, 1975.

The contract set out the creation of HCB, a majority Portuguese-owned company (81.66 percent) and the Mozambican state and the Bank of Mozambique with 18.34 percent.

It was then established that HCB should pay the entire investment carried out after by paying off the loans taken out for construction of the project.

It was also established that the concession would revert to the Mozambican state in the third year after the loans were repaid.

The change in the terms of the concession means that the Mozambican state will own 85 percent of HCB and the remainder will belong to the Portuguese state, and it will therefore “be treated like a national company that has obligations towards the State,” said the Council of Ministers spokesman, Luís Covane.

Covane said that 10 percent of HCB’s gross revenues would be handed over to the state and the company would pay rates and other taxes, would give preference to Mozambican suppliers and give priority to Mozambicans to fill vacancies.

Covane also said that the essential documents for transferral of funds would be signed between the banks involved and HCB on November 26, which means that the final US$700 million will be paid so the HCB can definitively be owned by Mozambique.

Covane also said that preparations were underway for the ceremony, which will take place in Songo on November 27, with the presence of the heads of state and government of the region’s countries, particularly those that will benefit from the electricity generated at HCB. (macauhub)