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Mozambique: Cahora Bassa deal by end of October?

The final agreement to hand over majority ownership of the Cahora Bassa hydroelectric dam, in the western Mozambican province of Tete, to the Mozambican state, may be signed in Maputo by 31 October.
A Portuguese government source told in Lisbon that for this purpose Portuguese Prime Minister Jose Socrates is to visit Maputo before the end of the month.

The Mozambican and Portuguese governments signed a memorandum of understanding on 2 November 2005, during President Armando Guebuza's first official visit to Lisbon, which envisaged the transfer of control of the dam operating company, HCB, from the Portuguese to the Mozambican state.

Currently Portugal owns 82 per cent of HCB, while the remaining 18 per cent is in Mozambican hands. The November 2005 agreement sought to reverse this situation: in return for a payment of 950 million US dollars to Portugal, Mozambique would end up with 85 per cent of HCB.

Optimists in Maputo assumed that the final deal would be signed in December 2005 or January 200 - but in fact everything stalled. Nothing was paid to Portugal, and not a single share was transferred to Mozambique.

The Portuguese excuse was that the deal had to be agreed by the European Union's independent statistical agency, Eurostat, which was investigating whether the sale violated Portugal's obligations under EU treaties.

Additional information: For full story see All Africa web site
News date: 26/10/2006

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