Mozambique Electricity Company cuts losses by half in 2016 – CEO

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Mozambique Electricity Company cuts losses by half in 2016 – CEO

12:04 CAT | 05 Jul 2017

File photo / EDM's CEO Mateus Magala

Losses incurred by public company Mozambique Electricity (EDM) fell by half in 2016, according to the consolidated balance sheet and profit and loss account published yesterday.

“The net negative result” of 983 million meticais “is a consequence of the high costs of acquisition and production of energy, which increased by 129 percent compared to 2015,” a statement from the company’s fiscal council printed in the Mozambican daily newspaper Notícias yesterday claimed.

These costs outweigh a 78 percent increase, from 16.3 to 29.1 billion meticais, in total energy sales, including a 79 percent increase in the volume of energy exported – from 862 to 1,541 GWh.

Mateus Magala, chairman of EDM’s board of directors, highlights in a message accompanying the accounts, achievements such as connecting two more districts (Malala in Tete and Molumbo in Zambézia) to the national grid, expanding the medium voltage network by 415 kilometres, and moving the country’s electrification rate up from 25.9 to 26.2 percent overall.

However, rising energy acquisition and production costs, vandalism of infrastructure, the unavailability of power plants and numerous other failures have limited gains.

The company’s leadership for the past two years acknowledges a number of constraints, such as “limited generation capacity, inadequate transportation infrastructure, inefficient distribution and marketing systems, poor corporate governance and business management” and “unsustainable debt that plunged the company into financial instability”.

Nevertheless, Magala gives 2016 a positive assessment, considering performance results “substantially positive”.

Among the challenges to be addressed is “consolidation of the ongoing transformation process” with “adoption of the highest ethical standards” as a public company, along with improvements in energy distribution networks and commercial services.

Magala also mentions the “negotiation of additional energy from Cahora Bassa Hydroelectric Plant for EDM, in response to the growth in domestic consumption needs in the short and medium term and at a competitive price”.

Source: Lusa