Moz takes majority stake in huge dam

MAPUTO – Mozambique on Tuesday took majority ownership of the massive Cahora Bassa hydroelectric dam from Portugal, ending a 31-year stalemate over one of the biggest legacies of Portuguese rule in the African nation.

“Cahora Bassa is now ours!” Mozambique President Armando Guebuza said after signing the agreement with Portuguese Prime Minister Jose Socrates. “This act removes from our soil the last obstacle, which marks the end of 500 years of foreign domination,” Guebuza said.Negotiations to transfer the dam began with Mozambique’s independence from Portugal in 1975.Mozambique now controls 85 per cent of the 2 000 MW dam on the Zambezi river in the western-most Tete province, leaving Portugal with the remaining 15 per cent stake.Under the agreement, Mozambique will pay US$950 million within 60 days as part of the transfer deal.Mozambique Finance Minister Manuel Chang told Reuters the debt would be paid in record time but ruled out any privatisation plans.”The company will be a public enterprise and we will be able to collect taxes,” Chang said.”We have laid the groundwork to pay the required US$950 million, after which we will make plans to make the dam more profitable,” he said.Cahora Bassa was built under Portuguese rule in 1960 with the aim of supplying power to former apartheid government of South Africa.Sixty per cent of the power now produced at Cahora Bassa goes to South Africa through its Eskom utility and to Zimbabwe through its power authority, ZESA.The fate of the plant is seen as crucial to luring investors to Mozambique, which is suffering a severe power shortage.One of the deal’s sticking points had been payment Portugal wanted from deeply indebted Mozambique for building and maintaining the dam.Earlier reports on the agreement said it included US$250 million in debt to Portugal and a further US$700 million for the 85 per cent stake.Nampa-Reuters”This act removes from our soil the last obstacle, which marks the end of 500 years of foreign domination,” Guebuza said.Negotiations to transfer the dam began with Mozambique’s independence from Portugal in 1975.Mozambique now controls 85 per cent of the 2 000 MW dam on the Zambezi river in the western-most Tete province, leaving Portugal with the remaining 15 per cent stake.Under the agreement, Mozambique will pay US$950 million within 60 days as part of the transfer deal.Mozambique Finance Minister Manuel Chang told Reuters the debt would be paid in record time but ruled out any privatisation plans.”The company will be a public enterprise and we will be able to collect taxes,” Chang said.”We have laid the groundwork to pay the required US$950 million, after which we will make plans to make the dam more profitable,” he said.Cahora Bassa was built under Portuguese rule in 1960 with the aim of supplying power to former apartheid government of South Africa.Sixty per cent of the power now produced at Cahora Bassa goes to South Africa through its Eskom utility and to Zimbabwe through its power authority, ZESA.The fate of the plant is seen as crucial to luring investors to Mozambique, which is suffering a severe power shortage.One of the deal’s sticking points had been payment Portugal wanted from deeply indebted Mozambique for building and maintaining the dam.Earlier reports on the agreement said it included US$250 million in debt to Portugal and a further US$700 million for the 85 per cent stake.Nampa-Reuters