13 December 2007
Maputo — The agreement whereby the Mozambican state took a majority holding in the Cahora Bassa dam on the Zambezi did not simply mean Mozambican control over a key asset but was "the removal of the final stronghold of foreign domination", declared Mozambican President Armando Guebuza on Thursday.
Giving his annual State of the Nation address to the Mozambican parliament, the Assembly of the Republic, Guebuza once more referred to the Cahora Bassa deal as the country's "second independence", and stressed that "control of this undertaking by our state will drive the rural electrification projects already under way, improving the quality of life for many more Mozambicans".
The agreement with Portugal over the dam was signed in October 2006, but was contingent on the Mozambican government paying Portugal 700 million dollars to acquire 67 per cent of the shares in Hidroelectrica de Cahora Bassa (HCB), the company that operates the dam.
Added to the 18 per cent that the Mozambican state already held, this gave Mozambique 85 per cent of HCB, while the Portuguese holding fell from 82 to 15 per cent.
The Mozambican government borrowed the money from a consortium formed by the French bank CA Lyon and the Portuguese Investment Bank (BPI), and the complex documents on the transfer were finally signed on 27 November. The consortium is to be repaid out of the sales of Cahora Bassa electricity.
"We recognize the debt, and we reiterate our confidence will comply with its undertakings", declared Guebuza. He dismissed the cynics who claim that Cahora Bassa is now owned by the banks.
"The debt should not corrode in any of us the feeling of victory and of ownership of the dam", he said, "Otherwise, we would be saying that if someone borrows money from a bank to buy a flour mill, then the mill doesn't belong to him but to the bank".
HCB would now become "a truly Mozambican company, subject to the normal fiscal regime", said Guebuza. "As from January 2008, it will pay a concession fee and taxes. It will also start distributing dividends, something which has never happened before in its 30 years of existence".
He announced that HCB has already begun contributing to the national treasury - on the very day that ownership was transferred, HCB paid 3.5 million US dollars in stamp tax.
Furthermore, with Mozambican control of the dam "there will be new mechanisms to adjust the tariffs and allocate the electricity on conditions that are more favourable to Mozambique", promised Guebuza.
The President noted that the national electricity grid now reaches 70 of the country's 128 districts, and that 90,000 new consumers were connected to the grid this year. But he warned that these efforts were being sabotaged by criminal gangs that steal cables and other electrical equipment.
"Our commitment to improve the supply of good quality electricity is systematically opposed by the vandalizing of electrical infrastructures, the theft of cables, and clandestine electrical connections", he said. "These crimes cause heavy losses to the country and immeasurable inconvenience to the consumers".
Guebuza put the cost of such sabotage at eight million dollars a year.
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