Cahora Bassa Hydroelectric (HCB), a company that operates the Cahora Bassa dam on the Zambezi River in Tete, Mozambique, made a profit of 7.2 billion meticais (about US$118 million) in 2017, despite the facility being unable to operate at its full capacity due to the low water level in the reservoir, Mozambican state news agency AIM reported.
Speaking in Maputo at an annual meeting on the performance of HCB, Moisés Machava, the company’s technical director, explained that a ‘cyclical drought’ recorded in 2016 reduced the amount of water in the reservoir to 41.8% of the ideal level.
In December 2016, the water level at the Cahora Bassa reservoir reached a minimum of 312.22 metres, or 8 metres below the guide curve (ideal level).vThis was the lowest level since the construction of the dam.
Based on measures taken by the Board of Directors and the above-average precipitation levels throughout the Zambezi Basin, 2017 saw a significant recovery in the reservoir level compared to 2016.
HCB’s management concluded that the level was not sufficient to keep the dam operating at full capacity and therefore decided to deactivate one of its five giant turbines (with an individual capacity to generate 415 megawatts of power).
HCB expects the recovery of the level of the Zambezi to continue through 2018, and that by the end of the year the water level will reach 320.12 metres. However, the company has revealed that it intends to operate only four of the five turbines throughout the year.
HCB generated 13,778 gigawatt-hours of electricity in 2017, more than the initial target of 12,906 gigawatt-hours, but less than the amount generated in the previous four years (reaching a peak of 16,978 gigawatt-hours in 2015).
South African electricity company Eskom is HCB’s largest customer, taking almost 71% of the energy produced. Mozambican public power company Electricidade de Moçambique (EDM), absorbs 24.5%, and Zimbabwean company ZESA takes 4.7%.
In total, HCB paid the Mozambican state about US$130 million in 2017 in the form of taxes, fees and dividends.
HCB’s finances were eased by the early repayment of the debt the Mozambican government incurred with a Franco-Portuguese banking consortium when it bought a majority stake in HCB from the Portuguese state in 2007.
The US$700 million loan, which should have been repaid with HCB’s profits by December 2017, was fully settled in June 2016, i.e. 18 months before the deadline agreed between the parties.