Mozambican government approves construction of Mphanda Nkuwa hydroelectric project

18 August 2010

Maputo, Mozambique, 18 Aug – The Mozambican government Tuesday approved the Mphanda Nkuwa hydroelectric project, which will have the country’s second-largest dam and cost an estimated US$2 billion, the country’s Energy Minister, Salvador Namburete said in Maputo.

At the end of a Council of Ministers meeting, Namburete said that the project outlined construction of a hydroelectric plant on the Zambezi river, 60 kilometres downstream of the Cahora Bassa facility and 70 kilometres from the city of Tete, with a 2,400 megawatt capacity to be reached in two phases.

The minister also said that the flooding area would be 97 square kilometres, which was very small when compared to Kariba and Cahora Bassa, on the same river, and thus just over 260 families would have to be relocated, according to surveys carried out in 2002 and 2005.

Namburete said that 60 percent of the capital would be in the hands of Mozambican bodies, specifically power company EDM, with 20 percent, and Energia Capital with 40 percent. The remaining 40 percent will be in the hands of Brazilian company Camargo Corrêa.

This consortium is the only one to come forward after another Chinese-backed consortium gave up after being selected based on the electricity law, which includes the possibility of directly awarding a project or selection through a tender process.

Thirty percent of the US$2 billion needed for construction of the facility are direct resources from the investors and 70 percent will be funded by banks.

Construction work on the dam, which is expected to take five to six years is due to begin in 2011, with the minister saying that until then, “we will be working on finalising the concession contract agreement, negotiating power purchase agreements and securing funding from financial institutions.”

Mozambique already has one of the world’s largest hydroelectric dam, in Cahora Bassa, Tete province in central Mozambique, in which the Mozambican state owns 85 percent and Portugal owns 15 percent. (macauhub)