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South Africa: Debt is One of the Factors Delaying the Import of More Energy from Mozambique

South Africa: Debt is One of the Factors Delaying the Import of More Energy from Mozambique

The South African Minister of Electricity, Kgosientsho Ramokgopa, said that the complicated nature of the transactions, the lack of urgency on the part of the South African electricity company (Eskom) and South Africa’s outstanding debt had contributed to the delay in importing another 100 megawatts of energy from Mozambique, a deal that was agreed in June.

According to the Mozambique Information Agency on Thursday, September 21, the five giant turbines at the Cahora Bassa dam in Tete province can, in theory, generate 2075 megawatts. Most of this energy is already sold to Eskom.

In the long term, a new hydroelectric dam will be built at Mphanda Nkuwa, on the Zambezi River, about 60 kilometers downstream from Cahora Bassa. From 2030, it will produce 1500 megawatts.

Earlier this month, the Mozambican government expressed frustration that no progress had been made by Eskom in finalizing the purchase of the electricity promised to help alleviate the continuous power cuts, known as “load shedding”.

According to Kgosientsho Ramokgopa, “the addition of 100 megawatts of electricity will increase South Africa’s electricity resources by 0.2% and is equivalent to about 10% of a load shedding phase. However, it was important for Eskom to access as many megawatts as it could.”

According to the South African government official, the issues related to the inherited debt between Eskom and its Mozambican counterpart, Electricidade de Moçambique (EDM), has to do with the complexity of the contract, which had to take into account the price of commodities and the exchange rate risk. “We’re going to do everything we can to go after every megawatt, because aggregation will help us put an end to load shedding,” he said.

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