28 November 2012

Mozambique: Natural Resources Benefit Entire Country - Guebuza

Maputo — Mozambican President Armando Guebuza on Tuesday took the example of the Cahora Bassa dam, in the western province of Tete, to show how natural resources should benefit the entire country, and not just those who live where the resources are found.

Speaking at the dam town of Songo, during celebrations of the fifth anniversary of the passage of Hidroelectrica de Cahora Bassa, the company that runs the dam, into majority Mozambican ownership, Guebuza said that Mozambican control of the dam had led to a great increase in the number of Mozambicans, throughout the country, who are benefitting from the power it produces.

The proof that Cahora Bassa does not benefit merely the people living in Songo or in Tete was that, since the change of ownership five years ago, 52 more districts have been connected to the national grid based on Cahora Bassa. The grid now covers 109 of the 128 district capitals, and the government plans to electrify the remaining 19 district capitals by 2014.

“The benefits of this strategic national asset are being enjoyed by an increasing number of citizens and of economic undertakings”, declared Guebuza. “What was a mirage, for almost all Mozambicans, five years ago, has been turning into a tangible reality in much of our country”.

There was nothing accidental or haphazard about the expansion of the national grid, Guebuza added, “because the managers of Cahora Bassa have taken on board our collective desire, as a people, to see the dam play a role of great relevance in driving forward the development of our beautiful Mozambique”.

Guebuza saw HCB as a catalyst of national unity, and proof that a resource located in one part of the country is a resource for all Mozambicans.

Mozambicans throughout the country had been able to use Cahora Bassa power without ever setting eyes on Songo.

“Cahora Bassa should continue to draw Mozambicans together”, he said, “and to play its role in strengthening our awareness of a common destiny”.

“The most important thing is that Mozambicans should feel that this resource called Cahora Bassa belongs to Mozambicans, and feel they are the owners of the other resources of this country”, he added.

Guebuza pointed out that one of the beneficial results in the switch of ownership from Portuguese to Mozambican hands was a sharp increase in the amount of power from Cahora Bassa used in Mozambique. Prior to the ownership change, HCB only sold 300 megawatts to the Mozambican electricity distribution company, EDM. That figure has risen to 500 megawatts (out of a total maximum generating capacity of 2,075 megawatts), and HCB has become one of the main contributors to state revenue.

Guebuza praised the competent and efficient way in which the current Mozambican managers are handling the dam. They had given the lie to those who had insinuated that Mozambicans could not run Cahora Bassa properly.

The management of HCB “fills us with pride”, he said. The effectiveness of the Mozambican management was such that “the last three financial years have been years of record production in the 35 year history of the company”.

“These results were achieved by Mozambicans, trained under the National Education System of our free and independent Mozambique”, Guebuza stressed.

“Over the last five years the number of foreign workers at HCB has been declining. In 2007, there were 35 foreigners, which was nine per cent of the total HCB staff. This year the number fell to 16, which is 3.2 per cent. Some of them have adopted Mozambique as the country of their hearts”.

The ownership change in 2007 involved boosting Mozambican ownership of HCB from 18 to 85 per cent, and cutting the Portuguese participation from 82 to 15 per cent. Purchasing the Portuguese shares cost the Mozambican state 700 million US dollars, which was obtained as a loan from a Franco-Portuguese banking consortium. This loan was to be repaid out of HCB’s profits, and to date the payments have been made regularly.

HCB sources in Songo told AIM that payments are being made faster than contractually required. The debt is to be paid off in ten years, but AIM’s sources suggest that in fact, the debt will be cleared in eight years.

The challenge now is to expand HCB’s capacity by building a second power station on the north bank of the Zambezi

“For us, it is a given that we shall build Cahora Bassa-North”, said one senior company source. “We shall do it as soon as we have paid off the debt, because then we can use money that is currently going towards debt servicing for the expansion of HCB”.

“What we spend on the expansion, we shall soon recover”, he added, “because there is a great demand for electricity both inside the country and in other countries of the SADC (Southern African Development Community) region. Because of the continual development of Mozambique and of the entire SADC region, we have a growing market”.

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