Mozambique eyes power options

Cape Town - Brazilian construction company Camargo Correa said a new $2bn 1 500 megawatt hydro-power station in Mozambique was expected to produce its first power in 2015, the company's chairman said on Thursday.

Vitor Hallack, Camargo's chairman said the company was the developer of Project Mphanda Nkuwa on the banks of the Zambezi, leading a group of companies including Mozambique's electricity company EDM.

Headquartered in Sao Paulo, Camargo Correa is a family-owned group active in the construction, cement, engineering and oil and gas services, with revenues of $10bn, Hallack said.

"On the first stage we contemplate 1 500 megawatts of energy to be generated, with investments of about $2bn," he told Reuters on the sidelines of a conference organised by South Africa's Standard Bank.

"If everything goes according to the preliminary schedule... we should start construction by 2011 and have first power produced by 2015," he said.

"Possibly down the road, we will have the second phase which would represent an additional 1 000 megawatts," he said.

The additional cost could be about $500m, he added.

Mozambique plans to supply the southern African region with 6 000 MW by 2014 from its major Cahora Bassa Hydro-Electric dam and other power projects in the country.

The country, emerging from decades of civil strife, has potential to generate 14 000 MW of hydropower.

However, Hallack said signing a power purchase agreement with South African power utility Eskom - which is looking at external sources to boost flagging power in Africa's strongest economy - would determine the project's timeline.

"The main milestone is to establish a power purchase agreement with Eskom and have a commitment to buy this energy through 25 years on a long-term basis," he said.

He did not set a deadline for this agreement to be signed.

- Reuters