Maputo, Mozambique, 4 March – The recently created Banco Luso-Moçambicano is to fund construction of the Mpanda Nkuwa hydroelectric facility, a project expected to cost over US$2 billion, Portuguese news agency Lusa reported citing a source close to the process.
The dam, which has been designed and is due to start being built in 2011, will be the second-largest hydroelectric project in Mozambique after Cahora Bassa.
The hydroelectric facility already has Brazilian and Chinese companies involved, and is funded by the China Exim Bank, Mozambican electricity company EdM and Brazil’s Camrgo Corrêa.
Banco Luso-Moçambicano will set up long term financing contracts.
However, the source said that construction of the dam depended on South Africa’s willingness to buy the electricity produced there, and the country is due to give the Mozambican government an answer by next July.
The dam will be located on the Zambezi River, in Changara district, 70 kilometres northeast of Tete and will have a reservoir of 100 square kilometres.
As well as this project, the source said that the new bank would be one of the main financiers of the Mozambican road network.
Banco Luso-Moçambicano de Investimento, which was officially set up on Wednesday, has starting capital of 366 million euros and is equally owned by Portuguese state banking group Caixa Geral de Depósitos and by the Mozambican treasury. (macauhub)