Mozambique, Portugal agree to create investment fund 2008-07-02 02:52:08   Print

    MAPUTO, July 1 (Xinhua) -- Mozambique and Portugal have signed an agreement to set up a fund to support investments in the Mozambican energy sector, local media reported on Tuesday.

    The fund will focus on projects for clean energy that will not only help combat the effects of climate changes, but also develop models for the sustainable production and use of energy.

    The fund will be managed by a Portuguese entity, the Sociedade Financeira de Appio ao Desenvolvimento (Development Aid Financial Support Company - SOFID), with a majority of public capital, which operates in the area of public aid for investments. The company will operate in close cooperation with the Mozambican government authorities.

    Under this agreement, which was signed in Maputo on Monday, Portugal pledges to raise 124 million U.S. dollars for the fund, to be used in support of projects designed by Mozambican or Portuguese individuals or companies.

    This money corresponds to the additional value that Mozambique was obliged to pay Portugal for a majority stake in Hidroelectricade Cahora Bassa (HCB), the company that runs the Cahora Bassa dam on the Zambezi.

    The price tag for the 67 percent of the shares in HCB that Mozambique purchased from Portugal last year was 700 million dollars. But a clause in the original agreement signed between Mozambican President Armando Guebuza and Portuguese Prime Minister Jose Socrates in Maputo on Oct. 31, 2006, not mentioned at the time, stipulated that Mozambique had to pay Portugal a further 124million dollars to "compensate" Portugal for the financial restructuring of HCB.

    So the real price of HCB was 824 million dollars, or 1,074 million dollars, if one also includes the direct payment of 250 million dollars from HCB's own coffers to write off the HCB debt to the Portuguese treasury. But now the 124 million dollars returns to Mozambique by a different route.

    Mozambican Energy Minister Salvador Namburete, who signed the document on Monday, on behalf of the Mozambican government, alongside Portuguese Finances Minister Fernando Teixeira dos Santos, said that the investment of the 124 million dollars in this sector is the result of a commitment by the Portuguese government during the negotiations over HCB.

    Namburete explained that technical teams from both countries are to start working to define how the fund will function to carryout the agreed terms.

    "We cannot say exactly when the agreement will start being implemented, but this is a starting point, and technical teams from both countries are now to start working to define the management of the fund", he said.

Editor: Yan Liang
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