Portugal is to give Mozambique a controlling stake in the Cahora Bassa hydroelectric project, one of the biggest dams in Africa.
Until now, Portugal has held 82% of the shares in the dam, which is operated by Hidroelectrica Cahora Bassa (HCB), and Mozambique owned only the remaining 18%.
But after Mozambique pays Portugal approximately US$700M in return for an 85% stake, this situation will be effectively reversed, and the Mozambican government will have a majority holding.
The deal came at the end of a three-day visit to Lisbon by Mozambican President Armando Guebuza, and was signed by the Portuguese Finance Minister Fernando Teixeira dos Santos and Mozambique’s Energy Minister Salvador Namburete.
Cahora Bassa, located on the Zambezi river in northwestern Mozambique, was completed in 1974, when the country was a Portugese colony. The move comes after years of negotiations between the two nations.