A US$700 million loan taken on by the Cahora Bass Hydroelectric Dam (HCB) to pay Portugal is being paid off ahead of schedule and is expected to be entirely amortized a year early, said the company’s chairman, Paulo Muxanga.
Until 2007 the Portuguese State owned 82 percent of HCB and the Mozambican State owned 18 percent but, under the terms of an agreement signed by both countries, Mozambique took on 85 percent of the country and Portugal 15 percent, which was later reduced to 7.5 percent.
To finance this sale the Mozambican government took on a US$700 million loan from a banking syndicate made up of French bank CA Lyon and Portuguese bank BPI, which would be paid off using profits from the company’s business.
Cited by the Mozambican press, Muxanga said that the repayment period was 10 years, but the contract allowed for early repayment and that based on this HCB had already paid US$139 million ahead of schedule.
“We expect the debt to be totally paid off in 2016, a year ahead of the contracted period, as we have already paid 59.6 percent of it,” said the chairman of HCB.
HCB has three big customers – South Africa’s Eskom, ZESA (Zimbabwe Electricity Supply Authority) and Mozambican state power company Electricidade de Moçambique (EdM) – and Muxanga gave assurances that ZESA was currently a “good customer” after paying its debts to HCB. (macauhub/MZ/PT)