Mozambique Energy: “HCB must diversify business and markets” – CEO

The Chairman of the Board of Directors of the Mozambican Hydroelectric Plant of Cahora Bassa (HCB), Pedro Couto, recently defended a diversification of the range of businesses and markets for the company to mitigate the risks it faces.

“It is imperative for HCB to expand and diversify the portfolio of businesses and markets” to “mitigate the risk of business concentration and hydrological risk,” he said in an interview with the Mozambican newspaper Notícias, at a time when Southern Africa feels the effects of a drought in the region.

To find answers “external experts of international standing have been mobilized who, together with national and company staff, work in these matters,” he added.

The orientation is part of the Strategic Plan 2018-2022, he said.

HCB announced earlier this year that energy production at the Cahora Bassa dam, Tete province, central Mozambique fell 11.53% from 2016 to 2017 due to the drought.

Even so, the amount of energy generated in the last year exceeded the fixed target by 6.76%, exceeding 13.7 thousand megawatts.

Still regarding the management of the firm, Pedro Couto pointed out as a good example the fact that, in 2016, the debt related to the reversal of the dam was still amortized in 18 months.

“It can be said that it is an example of what is called management by objectives in the corporate sphere,” Couto said.

The loan of US$800 million was contracted in 2007 to an international banking syndicate led by Calyon (now Crédit Agricole Corporate and Investment Bank – CACIB) to acquire the Portuguese State’s stake (85% of the shares) in the Cahora project Bassa.

Early repayment is also classified as a sign of management rigor, which, up to May, should translate into a dispersion of 7.5% of the share capital of HCB on the Mozambique Stock Exchange.

“It is not enough for shareholders to understand that the company should go public. It must meet strict governance and internal control criteria to qualify to enter,” Couto explained.