ELECTRICITY PRICES RISE

Mozambique’s publicly-owned electricity company, EDM, increased its prices, as of Tuesday, by between 27 and 40 per cent.The price per kilowatt-hour rises from 4.16 to 5.8 meticais (from 5.4 to 7.6 US cents, at current exchange rates) for consumers on the low voltage general tariff (for industries, trade, offices, shops and similar establishments) who use up to 300 kilowatt-hours a month. This is an increase of 39 per cent.

Use of more than 300 kilowatt-hours pushes the price up steeply. Between 301 and 500 kilowatt-hours the price rises from 5.94 to 8.29 meticais per kilowatt-hour. Above 500 kilowatt-hours a month, the increase is from 6.5 to 9.07 meticais per kilowatt hour.The preferential household tariff is considerably lower. For the first 300 kilowatt-hours, the price rises from 2.95 to 4.04 meticais per kilowatt hour, and between 301 and 500 kilowatt-hours a month from 4.17 to 5.72 meticais per kilowatt-hour. Consumption in excess of 500 kilowatt-hours now costs six meticais rather than 4.38 meticais per kilowatt hour. This increase is 37 per cent.Farmers enjoy a lower tariff. This agricultural tariff rises by only 27 per cent, from 2.68 to 3.4 meticais per kilowatt hour for the first 300 kilowatt-hours, and rising to 5.3 meticais per kilowatt hour for consumption in excess of 500 kilowatt-hours.

In addition, all these consumers pay an additional fixed rate, irrespective of consumption, which has risen from 108.82 to 152.37 meticais a month (a 40 per cent rise).

Consumers who use EDM’s pay as you go electricity meters (known as Credelec) face the same percentage rises. Thus a household using Credelec will now pay 5.14 rather than 3.75 meticais per kilowatt-hour, while the general pre-paid tariff rises from 5.96 to 9.07 meticais per kilowatt-hour. But the pre-paid price is the same regardless of consumption and there is no fixed rate charge.

The “social tariff” for low income domestic consumers who use less than 100 kilowatt-hours a month remains unchanged, at 1.07 meticais per kilowatt-hour.

Speaking to reporters on Monday, the chairperson of the EDM board, Mateus Magala, confirmed that the company’s tariffs were about to rise. He said this was essential “in order to mobilize resources to ensure universal access to electricity by 2030”. Magala said that, with a general tariff equivalent to 5.3 US cents per kilowatt hour, Mozambican electricity was the cheapest in the region. In other members of SADC (Southern African Development Community), electricity cost 12.5 US cents per kilowatt-hour, which made further investment possible, and this greater access to electricity.He warned that further price increases are likely so that Mozambican electricity prices can converge with those of the rest of the region by 2019. Magala insisted that electricity for the poorest strata of society would continue to be subsidized.Interviewed in Tuesday’s issue of the independent daily “O Pais”, EDM spokesperson Luis Amado, pointed out that EDM is still selling its power below cost. The company, he said, pays between nine and ten US cents for each kilowatt-hour, but was then selling the power on to its clients for not much more than half this amount. Even with the current rise in the general tariff to 7.6 US cents per kilowatt-hour “we are still below the desired level”.

“But we can’t make substantial increases all at once”, Amado said. “It has to be gradual and we are trying to reach a tariff that reflects the costs”.

He added that currently EDM only covers 27 per cent of the Mozambican population. The challenge facing the company was to reach 100 per cent. “We are still a long way from that”, said Amado, “and for this to happen EDM must have the capacity to invest”.

EDM is facing the consequences of the electricity price freeze that was in force from 2010 to 2015. The previous government, under President Armando Guebuza, was faced with riots over price rises in September 2010, and reacted with a variety of subsidies and price freezes on essential goods and services. For five years EDM was unable to put up its prices, despite its board repeatedly warning the government that the situation was unsustainable and that tariffs must rise.

AGREEMENT SIGNED ON ZAMBEZIA SOLAR POWER

The company Scatec Solar and the Norwegian Development Fund (Norfund) signed on Monday in Maputo a contract guaranteeing the sale of solar power to the publicly owned Mozambican electricity company, EDM, for a 25-year period.The contract was signed at a ceremony attended by the visiting Norwegian Foreign Minister Børge Brende and by the Mozambican Minister of Mineral Resources and Energy, Leticia Klemens.

The project will be the first large-scale solar energy production plant in Mozambique, and will be located in the city of Mocuba in the central province of Zambézia. With an installed capacity of 40 megawatts it is expected to supply 77,000 megawatt-hours per year to about 175,000 homes.

A shareholders agreement was also signed between KLP Norfund Investments AS (22.5 percent), Scatec Solar (52.5 percent) and Electricidade de Moçambique (25 percent), involving an estimated cost of USD 84 million.The project will be financed with USD 64 million (76 per cent) from the International Finance Corporation of the World Bank group. The remainder will be guaranteed by the shareholders; EDM’s part will be borne by the Norwegian government through a grant.

Scatec Solar also reported that the financial part of the project is nearly concluded. Construction of the solar power installation should begin in the first quarter of 2017 and be finished in December.

Also on Monday, the Confederation of Mozambican Business Associations (CTA), and its Norwegian counterpart, the Norwegian African Business Association (NABA) signed a memorandum of understanding establishing a basis for business cooperation.Under the agreement, signed by CTA chairperson Rogerio Manuel and the deputy director of NABA, Daniella Woldemichael, the two organisations will regularly exchange experiences in various sectors of business interest. Manuel claimed that Norway has some similarities with Mozambique in that it is a major producer of natural gas and an exporter of fisheries produce of worldwide recognized merit.CTA staff, Manuel said, will visit Norway to learn from the Norwegian experience, and Norwegian business people will come to Mozambique to see how the CTA operates. Through these contacts the private sector in Oslo could advise the CTA in how to improve public-private dialogue.In his visit to Mozambique, Brende brought 30 Norwegian business people on his delegation. 

MITSUI EXPECTS LNG PROGRESS BY MARCH

The Japanese company Mitsui has announced that it expects “certain progress” by March next year in the project to build a plant producing Liquefied Natural Gas (LNG) in Palma district, in the northern Mozambican province of Cabo Delgado.The company holds a twenty per cent stake in the Offshore Area One consortium where the operator is the US company Anadarko Petroleum. The consortium is still to make its final investment decision (FID) on how it will commercialise the 75 trillion cubic feet of recoverable natural gas already found in the concession.However, the news agency Reuters reports that on Wednesday the chief financial officer of Mitsui, Keigo Matsubara, told a press conference that the company expects “certain progress” in the LNG project by the end of the financial year (31 March 2017).Anadarko has a 26.5 per cent holding in Area One. In addition to Mitsui, its partners in the consortium are ONGC Videsh and BRPL Ventures of India (20 per cent and 10 per cent, respectively), the Thai Group PTT (8.5 per cent) and Mozambique’s own National Hydrocarbons Company, ENH (15 per cent).Initially, Anadarko plans to produce 12 million tonnes of LNG a year, using two factories (known as “trains”). Later it hopes to raise production to 20 million tonnes a year.

Premier African Minerals assumes control

Premier African Minerals Ltd has closed acquisition of a controlling stake in TCT Indústrias Florestais Lda, a Mozambican company with interests in a limestone mine and a logging business, indicates a statement released on Monday in London. 

Under the deal, Premier African Minerals Ltd will obtain a 52 percent stake in TCT Indústrias Florestais Lda for  US$2.1 million – 26 percent from Transport Commodity Trading Mozambique Ltd (TCTM) and 26 percent from GAPI Sociedade de Investimentos. TCT Indústrias Florestais Lda is a private company that holds a license to exploit a 27 sq. km limestone deposit and a 24,812 hectare forestry concession in central Mozambique. An associated sawmill and factory produce furniture and semi-finished products for export. The limestone deposit is located within the forestry concession 20 km southwest of Caia, served by the Sena railway line between Tete province and the city of Beira. The forestry concession is valid for the next 10 years and can be renewed for a further 50 years. The concessionaire is permitted to cut 3,000 cubic metres of wood per year.

According to Premier, TCT IF is self-sustaining and will contribute positively to group cash flows in 2017. Local demand for lime for cement production, agricultural and other uses underpins the case for a low capital cost industrial scale production development, while the forestry operations will significantly reduce exploration and development costs of the deposit.

George Roach, Premier African Minerals’ chief executive, said: “This is a unique opportunity to acquire a deposit that has very good prospects for development into a major low cost industrial scale mining operation, with essential infrastructure already in place and a cash generative business to help finance the development.”

Early testwork on surface material of the limestone indicates that there are potentially acceptable grades of calcium carbonate for limestone for use in cement production.

In addition, initial work suggests that solubility should be suitable for Agrilime and the material is also expected to be suitable for aggregate production.Premier plans to begin an initial exploration and assessment work programme on the limestone deposit over the course of 2017.Premier African Minerals is a company specialising in exploitation of natural resources in western and southern Africa. It is listed in the Alternative Investment Market of the London Stock Exchange.

MOTHO-MOTHO: "Bruce Lee Mozambican"

He is 99 percent authentic Chinese, lacking only those typical eyes to make 100 percent.

Although born in Xai-Xai, he has virtually nothing of the Mozambican about him. At the age of four he went to live in the Chinese province of Henan and enrolled in the coveted and selective Shaolin Temple, the oldest martial arts school specializing in Kung Fu. And he lived there for 20 years, almost a lifetime!

There, he learned from the great masters the art and secrets of Kung Fu, spread worldwide by the Bruce Lee movies in the 80s. It is safe to say that at this point he is the only Kung-Fu master in Mozambique. Not Judo, Karate or Tang So; Kung Fu is regarded as “another level” in the martial arts. Kung Fu applies deadly blows. Widely used by ninjas in the movies, Kung-Fu is the highest form of martial arts in the Eastern world.To get an idea of ​​the impact of Kung Fu, it suffices to say that if you, dear reader, were to take, for example, a slap in the face from a Kung Ku master, it would be enough to leave you at rest in a tomb in Lhanguene or in the new cemetery of Michafutene! That is why Kung Fu is not for everyone. It requires a lot of discipline and responsibility.

As for the Shaolin Temple, it is seen as the martial art most elite and prestigious place. For centuries and to this day, it continues to be seen as the only place in the world where the Kung Fu “teachers of teachers” go. There, only the “very good” are allowed in! Only the elect. That is why it is not easy to become a “resident” in this temple. Many Chinese, Korean and Japanese with the label of “excellent” are rejected and can not get in, and nepotism, corruption and bribery do not work there. In other words, it is a rarity to see an African in that temple. But a Mozambican, our countryman from Xai-Xai, Gaza province, lived in the Shaolin Temple for 20 years, cheek by jowl with the greatest fighters, with the “best of the best.” What a great accomplishment! A round of applause for our Mozambican, the man who put “Moz” on the Chinese map.

In the East, this “Mozachinese” lived in Shanghai, Shangdon, Beijing, Tienjin, Taipei and Hong Kong. Then he studied management in Canada and in the end returned to China. He went through the teachings and temples of great masters such as Wong Yeng, one of the oldest masters of Kung Fu, and responsible for the training of famous actors such as Jackie Chan and Jet Li.

He saw Jet Li himself visit the temple, casting for stuntmen to participate in his films.

His food habits align with Eastern habits and customs. How could they not? A typical Chinese eats dog, cat, snake, frog and other animals. It could not be otherwise, since he was living there from the age of four and ate whatever they gave him. (Chinese saying: “We eat anything with four legs as long as it’s not a table, and everything that flies, provided it’s not a plane.”) And in that temple, there was “xima,” mboa,” “matapa “,” xiguinha” [Mozambican traditional dishes] etc.

In Mozambique, he goes unnoticed. Simple and respectful, known to few, he is the epitome of anonymous. He does not care to “appear” (lessons learned in the temple). It is said that one day he came home and crossed paths with robbers who demanded his wallet and cell phone. He declined, asking the thieves to let him go. They laughed in his face: “Futseka! Suka! Wabiwa? “(Are you crazy?) And threatened to torture him for daring to refuse to hand over his belongings. Always the humble victim, he begged them almost on his knees to let him go, because he was a man of peace and never got into trouble. They told him “to go have a smoke”. 

As they finally approached, he warned them that he did not want to see the blood of his brothers and have to chase ambulances to transport them to hospital. This statement so angered the gang that they advanced to attack, and in the blink of an eye, the assailed man soared to an incredible height (just like in the movies) and landed with a spiral movement, felling the group with a single ” fan” kick. Everyone on the floor! Only a blow in self-defense. Without any intention to hurt.

They got up and off they rushed, shouting “Futseka! We also have Jackie Chan DVD. Let’s learn karate to you give you a really great beating!” From a safe distance, one of them improvised a karate gesture. He saw it, smiled, and sent a “Tchau”!This story could be confused with a movie about Alex Raúl Sitoe, known in the East as New Chung Hage, but to me as the “Bruce Lee of Mozambique”.

Swedish finance external audit

Sweden will finance an international audit and independent loans hidden for Mozambique worth about 1.4 billion dollars, reports Bloomberg today, citing a source close to the process.

According to the news of the financial information agency, the terms of reference for the audit, which is one of the requirements of the International Monetary Fund to resume talks on a new financial assistance program for the country, should be completed by the middle of this month after launching the Attorney General's Office an international public tender.

Bloomberg tried to contact the Mozambican PGR spokesman and the Embassy of Sweden in Maputo, but without success. Sweden is part of the group of international donors suspended earlier this year financial aid to Mozambique, following the disclosure of international loans with state guarantee, but were hidden from the IMF and all official institutions. The RMP of Mozambique, the source said Bloomberg, also indicated that the company's selection process that will audit will take a maximum of 90 days, which throws the start of the audit in mid-February, already sticking the deadline appointed by the Ministry Finance a presentation of the financial inability of the country, made in London in late October. Conducting an audit of accounts of public companies who have contracted international loans guaranteed by the state in the amount of 1.4 billion dollars (almost EUR 1.3 billion), and the process that led to the conversion of the Company's obligations Mozambican Tuna (Ematum) in government bonds is one of the requirements IMF to prepare a new financial aid program.

The other technical requirement of the IMF involves the assessment of public finances of the country, which is currently in 'debt distress', ie with debt stress or problems, which makes financial aid - to assess this debt the IMF uses to five indicators.

"Currently, Mozambique sticks all five indicators to assess debt sustainability", assumes the document presented to international investors, who therefore proposes a set of meetings with the creditors of SOEs Mozambique assett Management and Proindicus to outline the next steps.The main objective now is "resuming relations with the IMF to stabilize the economy and restore the confidence of the international community," but the government assumes that "discussions can only start if Mozambique is no longer in the country category with 'debt in effort '[debt distress in the original in English], which implies that the finances and public debt must be on a sustainable path, "reads the document.

Define the sustainable path, renegotiating the terms of payment of the debt, it is what the government intends to do with the lenders, and hired financial and legal advice of the British Lazard Frères and White & Case LLP, respectively, which from now on will be the face of the Government in contact with creditors.

The period desired by Mozambique passed by the start of meetings with creditors still in October, then in November to discuss the format of the restructuring of debts, to reach an agreement in December to begin payments in January, the time at the beginning of the next year start negotiations with the IMF on a financial aid package. Over 20 pages, the Finance show the inability to pay the debts of enterprises that have hidden loans, assume that the public debt will reach 130% of GDP this year, and take the opportunity to revise downwards the economic growth forecast to 3 , 7%, also stating bluntly that debt metrics are unsustainable. "The depreciation of the local currency has exacerbated the rising debt volume and the cost of servicing the debt, the level of external public debt and guaranteed by the state exceeds 100% of GDP in 2017, the cost of servicing the public debt and publicly guaranteed including late payments, should reach 826 million dollars, on average, between 2017 and 2021, or roughly 6.9% of GDP per year, "reads the presentation available to creditors.