Portugal currently holds an 82% stake in HCB, the dam holding company, while Mozambique holds the remaining 18%.
Cahora Bassa dam was constructed by Portugal on Mozambique's Zambezi river in the 1960s and 70s. It is one of the largest civil engineering projects ever carried out in Africa, and has created a 2000km2 artificial lake.
It produces 2000MW of power annually, with roughly 60% of it sold to neighbouring South Africa. Portugal says HCB still owes it some US$2.3B incurred in the construction of the project.
The agreement reached with ESKOM, the main purchaser of HCB power, could make HCB a profitable concern. Under the agreement, the South African electricity company has agreed to pay a tariff more in line with the market price of electricity by 2007. A dispute over tariffs led HCB to disconnect ESKOM for a few weeks in 2002.
According to reports the tariff paid by ESKOM for Cahora Bassa power will rise from the 2003 figure of about 0.6 US cents per kWh to about 2.1 cents in 2007
