Mozambique to Build Two Hydropower Plants

Mozambique has approved a $1.8 billion plan to build two hydropower plants to meet growing energy demand in the central province of Tete, home to some of the world's largest untapped coal reserves, a government minister said on Wednesday.

Unlisted Brazilian engineering group ATP Engenharia Ltda won a $1.2 billion contract to build a 600 megawatt (MW) hydropower plant and another $600 million to construct a 215 MW hydropower project, fisheries minister Victor Borges said.

The power will be sold domestically and to the rest of southern Africa. Mozambique already exports power to neighbors Zimbabwe and South Africa, which are struggling to meet demand.

Mozambique's discovery of significant natural gas reserves, coupled with rapid economic growth of 8 percent a year, has made the country an attractive destination for investment in the power sector.

Global mining giants such as Vale and Rio Tinto (RTNTF) are already developing coal fields left untouched during a 1977-92 civil war.

Mozambique also wants to construct a 3,000 km pipeline to carry gas from the northern province of Cabo Delgado to the capital, Maputo, and other southern parts of the country.

(Reporting by Manuel Mucari; Editing by Tiisetso Motsoeneng)