China bank to finance Mozambique’s 1,500-MW Mphanda Nkuwa

The Export-Import Bank of China has agreed to finance construction of the 1,500-MW Mphanda Nkuwa hydroelectrict project on Mozambique’s Zambezi River.

Mozambique’s O Pais newspaper quoted Energy Minister Salvador Namburete saying construction of the US$2 billion dam is to begin in 2010 in the northern Tete Province. The China Exim bank’s US$2.3 billion loan package also includes funding a transmission line from the dam site to Maputo, the capital.

A detailed proposal for construction of Mphanda Nkuwa boosted the capacity of the proposed project to 1,500 MW from 1,300 MW in 2007. Additionally, the project is seen potentially expanding to 2,400 MW. (HydroWorld 3/19/09)

“We expect to finalize concession contract negotiations with the electricity company (Electricidade de Mocambique) and other clients by June this year, then conclude financial deals,” Namburete said. “We expect the process to be finalized by December this year and construction should begin between April and May next year.”

International law firm Linklaters was appointed project counsel to Mphanda Nkuwa in 2008. (HydroWorld 10/30/08) The project is being developed by Brazil construction firm Camargo Correa, national utility Electricidade de Mocambique (EDM), and Energia Capital to supply power to Mozambique, South African utility Eskom, and the Southern Africa region.

Mphanda Nkuwa is to be built 60 kilometers downstream from the existing 2,040-MW Cahora Bassa hydroelectric project on the Zambezi River (HydroWorld 5/7/09), as well as the proposed 800- to 1,200-MW Cahora Bassa North hydro project. (HydroWorld 12/2/08)

EDM recruited consultants in March to serve as procurement specialist for a transmission backbone system to deliver power from proposed new hydro and thermal power plants in the area to southern Mozambique. Some of Mphanda Nkuwa’s electricity would be used in Mozambique, with the surplus exported to other countries of the Southern African Development Community.