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