The Cahora Bassa Hydroelectric Plant (HCB) has a 10-year investment plan in the amount of 500 million euros, Vital Capex, to recover and modernise the company’s electricity production system, said the company’s chairman.

Pedro Couto, in an interview with the Mozambican edition of Exame magazine, said that the Vital Capex will be financed partly through its own resources and the other part through national and international bank loans.

The financing will be facilitated by the fact that the company has a solid track record of results, a strong financial position and long-term energy sales contracts that provide stability and confidence to both domestic and international investors, the chairman said.

The investment programme is focused on renovating parts of the facility, improving the efficiency of installed capacity to ensure operability and sustainability of the production chain, he said.

“With these investments, HCB will increase the reliability of production and transportation of energy, ensuring that customers receive quality energy,” Couto said.

HCB produces power for two regional markets – South Africa, its main customer, and Zimbabwe, and it is said that Malawi could be the next destination for the electricity generated at the dam.

The company has two types of long-term contracts with the Electricity Supply Commission of South Africa (Eskom) and Electricidade de Moçambique (EDM) and short-term contracts with the Zimbabwe Electricity Supply Authority (ZESA), as well as energy sales contracts depending on the availability of additional production.

Cahora Bassa production in 2017 was affected by a drought that hit the Zambezi River basin, to reach 13.77 million megawatt hours, a drop of 11.5% compared with 2016, with total sales of goods and services reaching 15.575 trillion meticais (US$253.5 million), a year-on-year increase of 3.5%.

HCB is due to be listed on the Mozambican Stock Exchange through a Public Offering of shares representing 7.5% of its capital stock, as announced on 27 November 2017 by the President of Mozambique, Filipe Nyusi.

Last year, the company handed over to its shareholders – the Mozambican state with 85%, Redes Energéticas Nacionais, of Portugal, with 7.5% and HCB itself, with the remaining 7.5%, dividends in the amount of 1.181 billion meticais, equivalent to US$19.6 million.

Cahora Bassa is one of the biggest sources of revenue for the Mozambican state, which in 2017 in taxes, fees and dividends received about US$130 million. (macauhub)