Agencia de Informacao de Mocambique (Maputo)
12 April 2008
Maputo — Hidroeléctrica de Cahora Bassa (HCB), the company that runs the Cahora Bassa dam in Mozambique's western province of Tete, expects to sign an agreement shortly with the South African electricity company Eskom, under which HCB will supply an additional 250 megawatts to Eskom.
The recent rolling black-outs in South Africa have indicated how critically short of power the country is. Cahora Bassa is thus of crucial importance to Eskom, which needs every extra megawatt it can buy.
Contacted by AIM, the chairperson of the HCB Board of Directors, Paulo Muxanga, confirmed that on 3 April the two companies had signed a technical agreement establishing their undertaking to increase the amount of HCB energy supplied to South Africa.
"The agreement that will formalize this measure will be signed in the next few days", said Muxanga. "Now we are finalising the documents".
Muxanga said that this agreement will bring the amount of HCB power purchased by Eskom to 1,350 megawatts. In addition, HCB provides 400 megawatts for Mozambique's own electricity distribution company, EDM, 200 megawatts to the Zimbabwean power utility ZESA, and 35 to 40 megawatts to Botswana.
HCB's power station has five giant turbines each capable of generating 415 megawatts. So the dam's total generating capacity is 2,075 megawatts.
Muxanga said it is important to use HCB's productive capacity to the maximum possible. The company wanted to expand its capacity by building a new power station, on the north bank of the Zambezi (However, the Mozambican government has made clear that its priority is a new dam at Mpanda Nkuwa, some 60 kilometres downstream from Cahora Bassa, which will be built before HCB's north bank power station).
Muxanga pointed out that Cahora Bassa has never operated at full capacity. The new contracts, he said, are based on HCB's fifth turbine, which is its reserve generator.
A misleading statement issues by Eskom on 9 April claimed that the deal for the extra 250 megawatts had already been signed, and put the total power that Eskom will now purchase from HCB at an impossible 1,500 megawatts.
Since late November Mozambique has been in control of HCB. Previously it was the Portuguese state that had a majority holding in the company (82 per cent to just 18 per cent for Mozambique). But the Mozambican government has now purchased 67 per cent of the company from Portugal, bringing the Mozambican holding in HCB to 85 per cent, and reducing the Portuguese stake to 15 per cent.
This purchase cost 700 million dollars, financed by a loan from a Franco-Portuguese banking consortium. The money is being repaid to the banks out of the sales of Cahora Bassa power.
Thus, for the first time since the dam was built, in the 1970s, Mozambique has a controlling interest in the operating company, and appoints the chairperson and the majority of the Board of Directors.
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