Mozambique is trying to acquire control of the dam from Portugal, but the major sticking point is the debt still owed to the Portuguese treasury by Hidroelectrica Cahora Bassa (HCB), estimated by Lisbon at over US$2.1B.

During recent talks, the two sides decided on the terms of reference to choose a company that will study the volume of water moving through the dam, which will determine the maximum capacity of the power station.

Mozambique has proposed terms of reference for hiring a financial syndicate to pay off the debt to the Portuguese treasury, then recover the money from the sale of Cahora Bassa power. Once those terms of reference have been agreed, the two countries will hire whichever financial syndicate offers the best terms.

The original plan, dating back to 1975, was that the debt incurred in building the dam would be paid off as revenue came in from Cahora Bassa’s major client, the South African electricity company Eskom. As the debt was paid, shares in HCB were to be passed from Portuguese to Mozambican ownership. Three years after the debt was paid, Mozambique was to have taken full control of the dam.

The proposed scenario never occurred due to sabotage of the transmission lines by rebels throughout the 1980s and early 1990s. The current ownership structure of HCB is exactly as it was quarter of a century ago with Portugal owning 82% of the shares and Mozambique in control of the remaining 18%.

There are currently five turbines installed at the dam each capable of producing 415MW.