Cahora Bassa must diversify its business and markets – Couto

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Cahora Bassa must diversify its business and markets – Couto

12:44 CAT | 18 Jan 2018

File photo / Cahora Bassa

The Chairman of the Board of Directors of the Mozambique’s Cahora Bassa Hydroelectric Plant (HCB), Pedro Couto, is advocating the company diversify its business and markets for to mitigate the risks it faces.

At a time when Southern Africa is experiencing drought, “it is imperative for HCB to expand and diversify its portfolio of businesses and markets” in order to “mitigate the risk of business concentration and hydrological risk”, he said in an interview with the Mozambican newspaper Notícias.

To find answers, “external experts of international standing have been mobilised who, together with national and company staff, are working on these matters”. The re-orientation is part of the 2018-2022 Strategic Plan, he said.

HCB announced earlier this year that energy production at the Cahora Bassa dam, in Tete province, central Mozambique, fell 11.53 percent between 2016 and 2017 because of the drought.

The amount of energy generated in the last year nevertheless exceeded targets by 6.76 percent, at more than 13.7 thousand megawatts.

Regarding the management of the firm, Couto pointed out that it had possible to pay off the debt relating to the reversion the dam to Mozambican ownership 18 months ahead of schedule,

“This is an example of what is called management by objectives in the corporate sphere,” he said.

The loan of US$800 million was contracted in 2007 from an international banking syndicate led by Calyon (now Crédit Agricole Corporate and Investment Bank – CACIB) to acquire the Portuguese state’s 85 percent stake in Cahora Bassa.

Early repayment is as a sign of management rigour, which in May will also see 7.5 percent of the share capital of HCB sold on the Mozambique stock exchange.

“It is not enough for shareholders to understand that their company should be traded on the stock exchange. The company must also meet the strict governance and internal control criteria to qualify for listing,” he said.

Source: Lusa