Mozambique Cabinet Approves $2 Billion Hydropower Plant Project on Zambezi

Mozambique’s government said it approved the construction of a $2 billion hydropower plant on the Zambezi River that has been under discussion for the past decade, amid opposition by environmental groups.

“Construction of the Mphanda Nkuwa dam will begin next year after environmental and social-impact studies” are completed, Energy Minister Salvador Namburete said in a phone interview today from Maputo, the capital.

The project will be 40 percent owned by Sao Paulo-based Camargo Correa Desenvolvimento Imobiliario SA, 40 percent by Energia Capital, a closely held Mozambican company, and 20 percent by Mozambique’s government, Namburete said.

The facility will generate 1,500 megawatts of electricity, he said. Mozambique currently has the capacity to produce 2,226 megawatts of electricity, according to Bloomberg data.

Mozambique is increasing power generation amid plans to boost sales to neighboring South Africa by 75 percent over the next three years. A shortage of electricity in South Africa, the continent’s biggest economy, halted mining production in 2008.

Mphanda Nkuwa will be built 60 kilometers (37 miles) downstream from the state-owned Cahora Bassa hydropower dam, which has the capacity to produce 2,075 megawatts. The facility will have four turbines, each generating 375 megawatts, Namburete said.

Environmental groups have opposed the planned project because of the impact it may of have on the environment and the lives of Mozambican citizens. About 1,400 people would be displaced by the project and 200,000 subsistence farmers’ livelihoods would be threatened, according to the website of Berkeley, California-based International Rivers, an environmental lobby group.

To contact the reporter on this story: Fred Katerere in Maputo via Johannesburg at pmrichardson@bloomberg.net.

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