Mozambique takes control of Cahora Bassa

Mozambique will finally take control this week of the biggest dam in sub-Saharan Africa, which had remained in Portuguese hands for more than three decades after the former colonial power’s departure.

President Armando Guebuza will be joined by Portuguese Prime Minister Jose Socrates and seven other African heads of state at the Cahora Bassa Dam on Tuesday for a handover ceremony seen as marking a final break with the colonial era.

“We are finally going to be able to use the dam to satisfy the energy needs of our country,” said Guebuza ahead of the handover, which was made possible after Mozambique was able to buy out Portugal’s controlling stake.

The artificial lake created by Cahora Bassa, situated in Tete province, covers an area of 2 000 square kilometres that stretches to the point where the borders of Mozambique, Zambia and Zimbabwe converge.

After a troubled history it is now seen as key to providing clean energy not only for one of Africa’s poorest country, but also to several others in the region.

“Given its production capacity of more than 2 000 megawatts, Cahora Bassa is important for the development of clean and ecologically sound energy not only in Mozambique but for a big part of Southern Africa as well,” said government spokesperson Luis Covane.

Guebuza has expressed hope that as well as continuing to supply long-time customers South Africa and Zimbabwe, the dam can also provide electricity in the future to other neighbouring countries such as Zambia and Malawi in a region that is facing an increasing power deficit.

Since Mozambique’s independence in 1975, the former colonial power continued to control the dam by retaining an 82% stake while the government in Maputo owned a mere 18%.

Situated on the banks of the Zambezi River, the dam took six years to build and was only completed in 1975 as Portuguese rule drew to a close.

Paralysed during the 1976-1992 civil war as a result of sabotage attacks by Renamo rebels before being extensively repaired, it is the biggest hydroelectric dam in terms of concrete volume in the whole of Africa.

Only Egypt’s Aswan Dam, which has created a lake covering about 2 700 square kilometres, is bigger in terms of surface water.

Thirty years of on-off negotiations over its ownership were finally brought to a close on October 30 last year with the signing of a purchase agreement between Portugal and Mozambique, which Guebuza described as marking “the final chapter of the history of foreign domination” in Mozambique.

Under the terms of the agreement, the Mozambican government had to pay Portugal a total of $950-million to buy the 82% controlling stake still held by Lisbon.

While Maputo handed over an initial $250-million when the agreement was signed, it was given a 14-month grace period to come up with the balance.

On October 30, two months ahead of schedule, the government informed Portugal that it had already come up with the money necessary to buy all but 15% of the stake from Lisbon.

The last tranche of payment should be transferred by Mozambique to Portugal on Monday, according to Covane.

In order to finance the purchase, Mozambique launched an international appeal for funds in coordination with the World Bank and some of HCB’s clients, including South Africa’s state energy supplier Eskom and Zimbabwe.

The appeal was taken up by a Franco-Portuguese consortium, made up of the investment banks Calyon and BPI, which is underwriting the purchase agreement.—Sapa-AFP


Client Media Releases

UKZN student heads to FIFA Women's World Cup
NWU extraordinary professor discusses Global South