Electricidade de Mozambica (EDM), the Mozambican electric company owes $ 113 million to the Hidrolectrica de Cahora Bassa (HCB) for the 2019 budget year. A debt that is linked to the sale price of energy , then applied by EDM, combined with the effects of cyclones Idai and Kenneth.
In Mozambique, EDM, the national electric company owes 8 billion meticals, or $ 113.8 million to its main supplier, the Hidrolectrica de Cahora Bassa. “The period of reimbursement of the amount due to HCB will be established between the two partners and consultations to this effect are currently underway,” said Carta de Moçambique , EDM.
The company also claims that this debt has accumulated because it sells electricity to its customers at a price lower than the cost of its acquisition. It also estimates that the amount due will be subject to a reduction of 2.6 billion meticals according to its calculations by virtue of a tariff adjustment. In any event, the final amount will be agreed with HCB.
In addition to the sale price, EDM was also faced with unusual losses and costs due to out of control external factors such as Cyclones Idai and Kenneth that hit the country in March and April 2019. Electricity sales revenue fell by 25% due to government rebates to certain categories of consumers and the closure or downturn of certain industries. The company also found itself with a significant number of customers who no longer had the option of paying their bills.
Source: Agence Ecofin