REUTERS China to loan Mozambique $2.3 bln for power plant [FZYDQJL]
By Manoah Esipisu
JOHANNESBURG, May 10 (Reuters) - China's Export-Import Bank
(Eximbank) will invest $2.3 billion in the construction of a new
hydroelectric power plant in Mozambique, crucial to the southern
African country's plans to exploit its mineral resources,
officials said on Wednesday.
"The Mepanda Nkua dam and hydroelectric plant, on the
Zambezi river, will be built at a cost of $2.3 billion. The
government has signed a memorandum of understanding with
Eximbank on the financing arrangements," an official in Energy
Minister Salvador Namburete's office told Reuters.
"A decision on the commencement of the project is dependent
on agreeing all terms after a technical audit by the bank, and
talks with potential consumers of the electricity such as mining
companies and South Africa's power utility Eskom," the official
said by telephone from the Mozambique capital Maputo.
Mepanda Nkua power plant is expected to produce 1,300 MW and
would come on stream in 2010 or 2011, according to Energy
Ministry estimates. The facility is 70 km south of Mozambique's
main Cahorra Bassa power plant, in which Portugal is preparing
to hand over its 85 percent stake to the Mozambique government.
Mozambique was pressing for a late 2006 project start, the
official said.
He said the memorandum of understanding with Eximbank also
provided for the bank to fund the construction of the $300
million Moamba-Major dam in Maputo province, which will provide
clean drinking water for residents.
Specific funding details, such as interest rate and period
for repayment, were yet to be worked out, the official said.
BILLIONS OF DOLLARS POURED INTO AFRICA
China is pouring billions of dollars into Africa for
investment in infrastructure and commodities.
This year the Eximbank extended to $3 billion from $2
billion loans to Angola for the rehabilitation of infrastructure
ruined by three decades of civil war that ended with the
battlefield death of veteran rebel leader Jonas Savimbi in 2002.
Companies with or eyeing projects in Mozambique, such as
diversified miners BHP Billiton <BLT.L> and Brazil's Companhia
Vale Do Rio Doce <VALE5.SA><RIO.N>, say a shortage of
electricity could hamper investment.
Mozambique itself does not have enough electricity to supply
its manufacturing sector, seen as a major player in fuelling
economic growth.
President Armando Guebuza has made infrastructure
rehabilitation the key cog of his economic agenda as he strives
to convert 10 years of sustained growth in Mozambique into
better lives for a majority of his 18 million people.
Mozambique neighbour Zimbabwe already purchases some of its
power from Cahora Bassa, while growing demand from South Africa
means even with additional supply, demand will not be fully met.
"There is a genuine looming shortage of electricity in
southern Africa and Mozambique is well-placed to plug some of
the gap," said an official from Guebuza's office.
Cahora Bassa has a capacity of around 2,075 MW but produces
far below that. The government plans repairs and infrastructure
improvement to bring the plant to full capacity. It also plans
an additional plant adjacent to Cahora Bassa to generate another
850 mw of power and is in talks with various banks on the
financing model, the energy ministry official said.
Mozambique's power supply is expected to dramatically rise
in the next 5 years. Brazil's CVRD plans a 1,500 MW plant at
Moatize as part of its coal mining project there.
((Reporting by Manoah Esipisu; editing by James Jukwey;
Reuters messaging: manoah.esipisu.reuters.com@reuters.net, +2711
775 3155))
Keywords: ENERGY MOZAMBIQUE CHINA
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10May06 09:19 GMT
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