According to Mozambique's Deputy Finance Minister, Manuel Chang, the transfer of the Cahora Bassa dam on the Zambezi river into Mozambican ownership could be completed this year, if the negotiations currently under way with Portugal are successful.
Chang was speaking to AIM in Lisbon after a second round of negotiations between the Portuguese and Mozambican governments over the Cahora Bassa dossier.
Chang, who headed the Mozambican side, said "both the Mozambican and the Portuguese delegations are working as urgently as possible to conclude this process by the end of the year". He said the next round of talks will be held in Maputo on 14-15 July.
82 per cent of the shares in Hidroelectrica de Cahora Bassa (HCB), the dam operating company, are owned by the Portuguese state, and just 18 per cent by Mozambique. Under the original agreements with Portugal, shares should have been gradually transferred to Mozambique as the debt incurred in building the dam was paid off.
But the debt was never paid, thanks to sabotage by the Renamo rebels during the war of destabilisation. Hundreds of pylons were blown up, and for a decade and a half no power could flow from Cahora Bassa to HCB's main client, the South African electricity company, Eskom.
For years it was the Portuguese treasury that bailed out HCB, and successive Portuguese governments have been reluctant to cede control over HCB, without first solving the problem of the debt (usually estimated at about two billion US dollars).
The current government in Lisbon, under Prime Minister Jose Manuel Durao Barroso, says that it is, in principle, willing to negotiate a new shareholding structure, and let the management of the dam pass into Mozambican hands.
"I can assure you that the negotiations are on the right track", said Chang. He said the talks in Lisbon had centred on the arrangements which need to be made with a syndicate of financial institutions who will deal with the debt.
There is as yet, however, no firm consensus on what a new HCB shareholding structure would look like, or on how much electricity Cahora Bassa should generate. Essentially, the latter question concerns whether a second power station should be built at the dam, on the north bank of the river. "We didn't reach consensus on some matters which remain open for the next round of talks", said Chang. "But we did take decision on finding consultants who can study and advise us on how much energy HCB can produce".
Another question under discussion is how much power HCB should sell to Mozambique's own electricity company, EDM, and at what price. The bulk of the power produced is purchased by Eskom, and to increase the amount allocated to EDM, the Mozambican government has found itself obliged to negotiate with both Portugal and South Africa.
Chang would not be drawn on whether the negotiations might eventually lead to lower electricity prices for Mozambican consumers.
"What we discussed", he said, "was that Mozambique should benefit from an amount of HCB power at a special price, and even if this price is altered, it will never reach, let alone exceed, the price of the power exported to South Africa".
Font: AIM
