Portugal and Mozambique plan to join forces to press South African utility company Eskom to accept a price hike for power from the Cahora Bassa dam in central Mozambique. The price Eskom currently pays is much too low according to the Chairman of the dam’s operating company. Eskom had been paying only about two South African cents (approximately one-tenth of one US cent) per kW/hr for seven years, until the price was temporarily set at 3.7 South African cents per kilowatt/hour last year. Cahora Bassa management also wants payment to be made in US dollars rather than in the South African currency, which lost about 40% of its value against the dollar last year.

Eskom is the main user of Cahora Bassa power under an agreement signed before Mozambique became an independent country. Eskom then resells the same power to Mozambique’s electricity company, EDM, for use in the southern provinces of Maputo and Gaza.

Portugal owns 82% of the 2000MW dam, while Mozambique owns the remaining 18%.