210,000 New Electricity Connections By 2009

Jun 25, 2007 - Agencia de Informacao de Mocambique/All Africa Global Media

Mozambique's publicly owned electricity company, EDM, has pledged to provide 210,000 new connections in the period between 2007 and 2009.

The company has also committed itself to make investments of 382.1 million US dollars. 70 per cent of this is to be financed externally, and 30 per cent will come from EDM's own funds.

These are two of the commitments given by EDM in a new contract-programme signed with the government on Friday, which sets out the main activities that the company is to undertake in the three year period.

The contract also commits the government to assist EDM in seeking external funding for the planned investments.

The government pledges to negotiate, case by case, the payment of customs duties on all equipment and material imported for rural electrification projects, and to negotiate with EDM the partial cancellation of the company's debt to the state.

The latter will depend on EDM showing that its liquidity, solvency and indebtedness ratios are in line with the minimum required by good business practices.

"The government will make every effort to honour the undertakings contained in the contract programme", said Finance Minister Manuel Chang, who signed on behalf of the government.

"We are sure that EDM will likewise make every effort and mobilise resources to meet its targets in the agreed time span".

Chang urged the EDM Board to continue improving the company's commercial and financial management. He wanted to see a particular stress on "the management of clients in debt to the company, including state institutions" - a delicate way of saying that it is not just private citizens who should be disconneted if they fail to pay their electricity bills, but also government departments.

This, Chang said, would ensure "the generation of profits that will contribute to financing the company's activities and the state budget, through taxes and dividends".

The chairperson of the EDM board, Manuel Cuambe, said that the expansion and improvement of the national electricity grid, and the consequent increase in the number of people with access to good quality power, remains the major challenge facing the company.

EDM bore a great responsibility, he added, given that currently only eight per cent of the Mozambican population have electricity in their homes, and also that there is a looming energy shortage throughout southerrn Africa.

"All initiatives to increase domestic electricity production are now urgent", Cuambe said.

Summarising the company's work in 2006, Cuambe said that new connections had provided electricity for 85,000 households, and that EDM's pre-payment system (which makes it impossible for consumers to run up debts) now covered 46 per cent of its clients (up from 38 per cent in 2005).

Financing agreements for new projects were negotiated in 2006 for a total of 137 million dollars.

he company's duty now, Cuambe stressed, "is to continue with our electrification programme so that power reaches an increasing number of districts, administrative posts, localities and villages".

Other challenges, he added, included improving public lighting, reducing losses of electricity, and improving services to clients.

Cuambe warned, however, that reaching the targets set in the contract-programme depends greatly on a united effort to tackle the theft of cables and other electrical material which has taken on alarming dimensions in recent weeks.