Malawi to decide power supply by Mozambique

Maputo, Mozambique - The supply of electricity generated at the Cahora Bassa dam in the western Mozambican province of Tete to neighbouring Malawi now depends exclusively on the Malawian authorities, according to Energy Minister Salvad or Namburete, cited in Thursday's issue of the Maputo daily "Noticias".

Mozambique has signed an agreement with the World Bank for a loan of US$ 45 million to build an electricity transmission line from Cahora Bassa to the Malawian border, and construction of this line could start at any time.

The agreement between the two countries states that each will be responsible for building the transmission line in its territory.

Namburete said that everything is on hold, because of the current institutional crisis in Malawi.

The battle between Malawian President Bingu Wa Mutharika and the country's parliament is coming to a head, with threats by the President that the army will dissolve parliament if it does not pass this year's budget by 15 August.

Dissolution would be a serious setback for the electricity plans, since it is the parliament that must ratify the agreement on building the new line from Cahora Bassa.

The programme to interconnect the Mozambican and Malawian electricity grids was designed several years ago, as part of the drive to create a single energy market in southern Africa.

The new line should be in place next year, but the Malawian crisis threatens all deadlines.

The first step to negotiate electricity supply between the two countries came in 1998, when the two governments signed a memorandum of understanding, which made it clear that Malawi would eventually purchase Cahora Bassa power.

The Malawian Electricity Board launched a tender in 2003 to select a supplier and it was won, as expected, by the Cahora Bassa operating company, HCB.

Namburete thought, however, that the overall energy picture looked promising.

Negotiations on several major projects - for a new dam at Mpanda Nkuwa on the Zambezi, for a coal-fired power station at Moatize ion Tete, for a gas fired stati o n at Temane, in the southern province of Inhambane, and for a new transmission line from Tete to Maputo - are approaching financial closure.

Namburete was optimistic that all the financial engineering would be agreed with the next 12 months, and then construction could start.