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Mozambique Aims to Terminate Hydropower Agreement with South Africa

Mozambique to Cease Hydropower Supply to South Africa, Posing Risks for Economy and Aluminum Smelter

Mozambique is set to put an end to its half-century-long hydropower supply to South Africa’s state-owned electricity utility. This move raises concerns for the continent’s most industrialized economy and jeopardizes the future of Africa’s second-largest aluminum smelter.

According to an energy transition strategy, which Bloomberg has obtained a copy of, Mozambique plans to secure the 1,150 megawatts of power currently sold to South Africa from its Cahora Bassa plant for domestic consumption instead.

The decision by Mozambique to halt the hydropower supply to South Africa comes as a significant development, considering the long-standing relationship between the two countries in the energy sector. For the past 50 years, Mozambique has been a reliable source of electricity for South Africa, supporting its energy demands.

This decision poses substantial risks for South Africa’s state-owned electricity utility, which heavily relies on the imported hydropower. The sudden withdrawal of this power supply could lead to electricity shortages and potential disruptions in the country’s industrial and commercial activities. It may also increase the likelihood of blackouts, negatively impacting the economy and its productivity.

Furthermore, the move threatens the viability of Mozambique’s aluminum smelter, which heavily depends on the reliable and affordable electricity supply from South Africa. The smelter, one of Africa’s largest, plays a crucial role in the country’s economy, providing employment and generating foreign exchange through exports.

Mozambique’s energy transition strategy, yet to be officially published, indicates a shift in priorities as the country seeks to meet its own growing energy demands. With industrialization and economic development on the rise, Mozambique aims to prioritize its domestic electricity requirements, ensuring sufficient power supply for its own industries and households.

This strategic decision highlights the need for South Africa to diversify its energy sources and reduce its dependence on external suppliers. It underscores the importance of developing and investing in alternative energy generation capacities within the country, such as renewable sources like solar and wind power.

While the cessation of hydropower supply from Mozambique poses challenges for South Africa, it also presents an opportunity for the country to explore new avenues for energy production. This shift towards self-reliance in the energy sector can lead to greater energy security and independence in the long run.

In conclusion, Mozambique’s plans to terminate its hydropower supply to South Africa’s state-owned electricity utility have significant implications for both economies. South Africa faces the risk of electricity shortages and potential disruptions, while Mozambique aims to prioritize its domestic electricity needs. This decision emphasizes the importance of diversifying energy sources and developing alternative energy generation capacities within South Africa.

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