Construction of 1,350-Megawatt Hydroelectric Dam in Mozambique to Begin in mid-2010

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Researched by Industrial Info Resources (Sugar Land, Texas)--Mozambique's Energy Minister Salvador Namburete recently announced that construction of the 1,350-megawatt (MW) Mpanda Nkuwa hydroelectric dam on the Zambezi River would commence in April or May 2010. The $2 billion project would be set up in the northern province of Tete about 60 kilometers downstream of the existing Cahora Bassa dam. The project is being promoted by the New Partnership for Africa's Development and Mozambique's Ministry of Mineral Resources and Energy. Mozambique's government hopes that the project will attract energy-intensive industries to the nation.

The Export-Import Bank of China (Beijing) will extend a $2.3 billion loan to set up the dam. The loan amount includes funds required to lay the transmission line from the project site to Mozambique's capital city of Maputo. The two parties signed a memorandum of understanding for the loan in 2006. Part of the power generated from the project would be used domestically while the surplus would be exported to the neighboring power-starved countries in the Southern African Development Community. Concession contract negotiations are currently under way with various clients as well as with Mozambique's state-owned electricity company Electricidade de Mocambique EP (Maputo).

The Mpanda Nkuwa hydroelectric project has faced severe criticism ever since it was proposed. Critics have said the project would not benefit Mozambique's common man. Only 14% of Mozambique's common populace currently has access to grid power. The dam is likely to displace thousands of people and disturb the livelihoods of farmers and fishers living downstream of the dam. The daily fluctuations of the river water are likely to cause regular mini-floods, reduce the flow of natural sediments, cause environmental damage and make downstream restoration of the delta an uphill task.

The Cahora Bassa hydroelectric dam on the Zambezi river system is the largest hydroelectric project in southern Africa. The facility includes five 415-MW turbines and supplies power to 86 of the nation's 128 districts. In 2008, Paulo Muxanga, chief executive of the venture, said the country plans to invest about $109 million in 2009 to refurbish the 2,075-MW power plant. According to Muxanga, the dam has the potential to generate 14,000 MW of power daily. The facility currently exports 60% of its power to South African utility Eskom (Johannesburg) and 35% of its power to the Zimbabwe Electricity Supply Authority (Harare, Zimbabwe), a state-owned power utility. Only 5% of the power generated is utilized within the country.

Earlier this year, the government of Mozambique approved an $8.5-billion plan to ramp up the country's power generation capacity to about 3,040 MW by making greater use of its hydropower potential. The new 2009-13 Energy Strategic Plan outlines ways to incorporate old and new energy generation projects and increase the power exporting capacity of the country. The move is also expected to attract greater foreign investment to the nation. Mozambique is one of Africa's poorest countries, and it is struggling to rebuild its economy after the 17-year civil war that ended in 1992.

According to Namburete, the nation hopes to be able to meet the power needs of its neighboring countries as well those regions where mining projects have had to be shelved because of power shortages. Although Namburete has not disclosed any names, he said that a major part of the funds would be procured from government initiatives and that the rest would possibly be procured from private foreign investors.

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