- Title: MOZAMBIQUE: Government buys back control of giant Cahorra Bassa Dam from Portugal
- Date: 29th November 2007
- Summary: VARIOUS PRESIDENTS IN SHADE ZIMBABWEAN PRESIDENT ROBERT MUGABE SEATED
- Embargoed: 14th December 2007 12:00
- Keywords:
- Location: Mozambique
- Country: Mozambique
- Topics: International Relations,Energy
- Reuters ID: LVA8QRKWO150KOQWKLXMQDKBP82S
- Story Text: Portugal formally handed over the massive Cahora Bassa dam to Mozambique this week, ending a 31-year stalemate over one of the biggest legacies of Portuguese rule in the African nation. Cahora Bassa dam, built on the Zambezi river, is Africa's second largest after the Aswan Dam in Egypt. It was built under Portuguese rule in 1960 with the aim of supplying power to the former apartheid government of South Africa. Mozambican President Armando Guebuza presided over the ceremony which was held at the site of the dam in Songo, in the country's central Tete Province on Tuesday (November 27). In attendance were Portuguese Prime Minister Jose Socrates, Zimbabwean President Robert Mugabe, Botswana's Festus Mogae, Levy Mwanawasa of Zambia and the Prime Minister of Swaziland, Absalom Dlamini. "We have now successfully concluded the process of the removal, from our soil of the last symbol of the 500 years of foreign domination," President Guebuza told a cheering crowd that turned up to witness the event. Negotiations to transfer the dam began with Mozambique's independence from Portugal in 1975. Portugal retained 82 percent interest in Cahora Bassa while the Mozambican government had just 18 percent. "From today, Cahora Bassa joins the other resources with which our Mozambique is endowed with, to take part in the implementation of our national agenda against poverty," said Guebuza and added "Cahora Bassa is ours." The dam currently supplies power to South Africa, Namibia, Botswana and Zimbabwe. Sixty percent of the power now produced at Cahora Bassa goes to South Africa through its Eskom utility under contracts signed before independence. Mozambique now controls 85 percent of the 2,075 Megawatts dam leaving Portugal with the remaining 15 percent stake. Under the agreement, Mozambique will pay its former colonial power 700 US million as part of the transfer deal. Two European banks, France's Calyon Bank and Portugal's Investment Bank lent Mozambique the 700 million US dollars needed to pay off the debt. The dam which has the potential to generate 14,000 megawatts of power is seen as key engine of the effort to revitalize Mozambique's economy, which was shattered by two decades of civil war. The country, which is suffering a severe power shortage, intends to use the dam to lure investors to Mozambique. If successful, the dam will earn the country an annual income of 150 million US dollars. Mozambique now consumes only five percent of the energy produced from dam, which it buys back from South Africa at market prices. Mozambique already plans to start selling electricity from the dam to neighbouring Malawi beginning in 2009 and supply Malawi and its commercial capital Blantyre with 300 megawatts of power.
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