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Maputo - Mozambique's government has signed off on a $2bn plan to build a second hydro-electric dam in the north of the country in a bid to boost the economy, state media reported on Wednesday.
Mphanda Nkuwa dam will be built in the northwestern province of Tete and produce 2 400 megawatts electricity at full capacity once completed, Noticias newspaper said.
"It is an infrastructure that will bring about quality investments which will contribute to the industrialisation as well as the social and economic development of the country," Energy Minister Salvador Namburete said.
Mphanda Nkuwa will be the southern African country's second hydroelectric station after the Cahora Bassa dam, which is just 60km upstream on the Zambezi river.
Cahora Bassa is Africa's largest energy-producing dam, providing 2 075 megawatts of energy, of which 60% is sold to neighbouring South Africa.
Mozambique will hold a controlling share in the dam through state companies Electricidade de Mocambique and Energia Capital, with 40% owned by Brazilian energy producer Camargo Correia.
The consortium was the only one left after a Chinese group withdrew from the tender process.
The concessionary contract will be finalised once environmental impact studies are completed by the end of next year, said Namburete.
About 260 families will be relocated before construction, he said.
Cahora Bassa itself will undergo a $20m renovation over the next four years to maintain the sluice gates.
A $1.7bn protocol was signed in July to link the power stations in the north of the country to southern Mozambique and the rest of southern Africa.
