In all, according to the Center for Democracy and Development (CDD), a non-governmental organization (NGO), the Cahora Bassa Hydroelectric Company (HCB) received 247 million euros out of a total of 507 million euros sought by the company.

"Strangely, there is no information on the company's official website about the loan packages in question, their raison d'etre, or how they should affect the company's financial situation and the income of the state and Mozambicans as shareholders," says an NGO document published today.

"This situation is worrying not only because of the non-transparent way in which the process has been conducted, but also because of the (political) timing of the multimillion-dollar debts. There are many questions, legitimate ones to be sure, to be clarified about the investment of half a million euros sought by the company," reads the same NGO document.

As well as being a majority state-owned company (85%), the NGO points out that "Mozambican citizens hold shares in this important company which, ideally, should voluntarily provide reliable and timely information on the performance of its business, assets and financial situation".

In July 2019, HCB joined the official stock market of the Mozambique Stock Exchange (BVM) in an operation that consisted of selling 4% of its shares, having promised to disperse the second tranche, corresponding to 3.5%, as soon as the "conditions" allowed.

However, in the NGO's opinion, the financing of any HCB modernization programme would have to come from the capital market, whose main function is to mobilize long-term resources for investment projects, which is not even mentioned.

The CDD also says in its document that the new multi-million dollar debts are all the more worrying because HCB is majority-owned by the state.

"And here the question is how will the deterioration of HCB's financial autonomy affect the state's already high exposure to fiscal risks through the state-owned enterprise sector?" the NGO asks.

And it doesn't stop there. The NGO wants to know if these considerations have been given due attention by the Institute for the Management of State Holdings (IGEPE).

"It is expected that the level of credit risk will increase following the company's ongoing multi-million dollar debt undertaking, increasing its fiscal risk," the document reads.

The NGO fears that this company, which for a long time remained in the select group of companies with good financial health, is now moving towards those that are considered bankrupt companies in the SEE (LAM, TMCEL, among others).

the CDD believes that there is an urgent need for the IGEPE, in its capacity as manager of state holdings and in accordance with the attributions and competencies contained in its Organic Statute (Decree no. 46/2001 of December 21), to communicate what is actually happening at HCB and what strategies are being pursued to mitigate the financial risk arising from the company's investment plans.