Maputo — The Mozambican and French governments signed an agreement in Maputo on Monday under which the French Development Agency (AFD) will provide a loan of 50 million euros (65 million US dollars) to rehabilitate the Mavuzi and Chicamba power stations in the central province of Manica.

The agreement was signed by Mozambican Finance Minister Manuel Chang, French ambassador Serge Segura and the head of the AFD’s sub-Saharan Africa Department, Yves Boudot.

The Mavuzi and Chicamba dams, owned by the public electricity company, EDM, are both on the Revue river. The rehabilitation project should increase the generating capacity of the two power stations by 50 per cent, so that Mavuzi produces 52 megawatts and Chicamba 38 megawatts.

Chang said that, in addition to France, the project also benefits from Swedish aid. The Swedish International Development Agency (SIDA) has granted 300 million Swedish crowns (45 million dollars).

Negotiations are also under way with the German Development Bank, KFW, for a loan of a further 18 million euros. The total financing package envisaged, said Chang, is 102 million euros.

Segura said that the rehabilitation of the two power stations will increase access to relatively low cost electricity for people living in central Mozambique.