14 February 2008
Maputo — The debt incurred in the Mozambican government's purchase of a majority holding in the Cahora Bassa dam could be paid in as little time as seven years, according to Paulo Muxanga, chairperson of the board of directors of the dam operating company, Hidroelectrica de Cahora Bassa.
In November, the government borrowed 700 million dollars from a consortium of French and Portuguese banks to purchase 67 per cent of the shares in HCB from the Portuguese government. This lifted Mozambique's holding in HCB to 85 per cent, while the Portuguese holding fell to 15 per cent.
The money is being repaid to the banks through HCB's sales of electricity, and it was envisaged that the repayment would take ten years.
But, cited in the Beira daily paper "Diario de Mocambique", Muxanga said that the profitability of HCB is now such that the entire debt could be paid off within seven years. "The repayment period could be extended to ten years", he said, "but the entire debt could also be liquidated in seven years".
The latter would be the cheaper option, since the longer HCB takes to pay off the debt, the more interest it must pay to the banks.
As for the money owed to HCB by the Zimbabwean electricity company, ZESA, Muxanga said that ZESA was now honouring its commitments, and had pledged to pay off the remaining debt of 16 million US dollars within six months.
ZESA found in January that HCB under Mozambican management is tougher on debtors than the Portuguese management had been. After promises of repayment had been repeatedly made and broken by ZESA, on 1 January HCB disconnected Zimbabwe. HCB power only started flowing to Zimbabwe again eleven days later, after ZESA had paid 10 million dollars.
Muxanga said the dam is fully operational, but faces a threat from farmers planting on slopes above the dam, in areas which ought to be prohibited. These fields lead to erosion, and the washing of top soil into the dam lake, causing silting. Rocks were also falling onto the access road to the dam from the fields above.
Muxanga said this matter would be discussed in a seminar with community leaders. His solution was that the dam town, Songo, should no longer be the capital of Cahora Bassa district. The capital should be moved instead to Chitima, in the east of the district.
Such a move, Muxanga argued, would reduce the number of people living in Songo, which would revert to being a town for the workers of HCB and of a few other important institutions.
Last week, HCB received a team of six consultants from the Canadian company Manitoba Hydro, which has been hired to supervise the operation and maintenance of the dam, and thus give guarantees to the banks that their money will indeed be repaid. Manitoba will send teams regularly to Songo to check on the state of the dam.
On this first visit, the team was headed by the Manitoba general manager, Nigel Willis, who confirmed that the dam was "in first class condition". He found "no reason for complaint" in the dam's operations.
Given the technical skills of the HCB staff, he was sure that there would not be much extra training work for Manitoba to do. "We found that they are capable of assimilating in a very short period material concerning new technologies for dam management and maintenance", said Willis.
For his part, the HCB deputy director for machinery and maintenance, Moises Machava, said that the company is very healthy, and all five turbines (each capable of generating 415 megawatts) are working in full.
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