Moz may buy stake in dam
2004-02-06 22:13
Lisbon - Portugal wants to sell Mozambique a controlling stake in the giant Hidroelectrica Cahora Bassa (HCB) power company, which runs Africa's second-largest dam, a top Portuguese official said on Friday.
"We have a commitment with the government of Mozambique, which is backed by the Portuguese government, to cede the majority of HCB's capital to Mozambique," Portugal's chief negotiator in Mozambique, Luis Amaral, told the Lusa news agency. "We are ready to sell."
He said negotiations between Portugal and Mozambique on the sale of the stake would begin after an evalution of company's assets is completed by Swiss bank UBS.
Portugal currently holds an 82% stake in HCB, while Mozambique holds the remaining 18%.
The company operates the massive Cahora Bassa hydroelectric dam, located on Mozambique's Zambezi River, which was built by Lisbon in the 1960s and 70s when the country was still a Portuguese colony.
HCB produces 2 000 megawatts of power annually, roughly 60% of it which is sold to neighbouring South Africa.
Amaral said Portugal, Mozambique and South African power company Eskom agreed on Tuesday, after two years of negotiations, to increase the rates HCB charges its neighbour for its electricity exports.
He said the company would shortly start charging Eskom 83 euro cents per kilowatt-hour, more than double the current rate of 40 euro cents.
The rate will rise to 1.41 euros per kilowatt-hour in 2007.
"This agreement means HCB will start charging international market prices and will start generating revenues which will allow it to pay a significant part of its debt to Portugal," Amaral said.
Lisbon says the company still owes Portugal some $2.3bn related to the construction of the dam.
Amaral said Portugal will seek guarantees from Mozambique that the debt will be paid during the negotiations over the sale of its stake in HCB.