The Mepanda Unkua Project

The Mepanda Unkua Project – a planned regulation
of the Zambezi River in Mozambique
Results from a study trip, June 23 – July 18, 2003
By Christian Hillmann and Leif Tore Trædal
Osterhausgt 27, N-0183 Oslo, Norway, e-mail: fivas@fivas.org, www.fivas.org ,
Tlf: (+47) 22 98 93 25, Fax: (+47) 22 98 93 01

2
Table of contents
List of Acronyms..............................................................................................................................3
1. Introduction..................................................................................................................................4
1.1. The Cahora Bassa Dam ......................................................................................................4
1.2. Objective ..............................................................................................................................6
2. Methods........................................................................................................................................7
3. The Mepanda Unkua Dam Project...............................................................................................8
3.1 The Mepanda Unkua area...................................................................................................8
3.2. Important actors: UTIP, NORAD and Norconsult..........................................................8
3.3. Possible social and environmental impacts of the project...............................................9
4. Findings and Discussions...........................................................................................................14
4.1. Mepanda Unkua and the World Commission on Dams................................................14
4.2. NORAD support to UTIP - addressing poverty? ...........................................................16
4.3. CDM Funding....................................................................................................................17
5. Conclusions and Recommendations...........................................................................................18
Appendix 1: List of interviews and meetings.................................................................................19

3
List of Acronyms
DNE Department of Energy in Mozambique
EIA Environmental Impact Assessment
FIVAS Association for International Water and Forest Studies
HCB Hidroelectrica de Cahora Bassa
IRN International Rivers Network
MICOA Environmental Impact Assessment Department of Mozambique
NGO Non-Governmental Organisation
NORAD Norwegian Agency for Development Co-operation
NVE Norwegian Water Resources and Energy Directorate
UTIP Technical Unit for Implementation of Hydropower Projects
WCD World Commission on Dams

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1. Introduction
This report concerns the Mepanda Unkua project, a planned large-scale regulation of the Zambezi
River in the Province of Tete in Mozambique. Large-scale dams can potentially provide multiple
benefits in terms of power supply, flood control and irrigation for agriculture, but they also
frequently cause serious damage to the environment and people. The World Commission on
Dams (WCD) recognises that it is too often the poor people affected by river regulations who
have to pay the price in terms of loss of resources and livelihoods, and lack of fair and adequate
compensation.
The rationale behind the Mepanda Unkua project is the perceived high development potential of
the Zambezi River for the economic development of Mozambique. The Zambezi River is the
fourth largest river in Africa, originating in Angola 2.660 km from the coast of Mozambique,
where its water flow has grown into a massive 22.000 m3
/s. On its journey to the ocean the water
passes the mighty Victoria Falls, before it makes the north-south border between Zimbabwe and
Zambia for approximately 1.000 km. Further downstream it is regulated by the huge Kariba Dam,
before the river reaches Cahora Bassa in the Province of Tete in Mozambique (See Figure 1).
Zambezi is not only unique in terms of high hydropower development potentials, but also in
terms of its high number of important ecosystems and habitats, including wetlands, riverine
woodlands, dry forests, savannahs, and aquatic ecosystems.
The planned project must be understood in the context where energy and river regulation are a
symbols of national progress and development. The great Cahora Bassa Dam is one of the largest
hydropower constructions in the world.
1.1. The Cahora Bassa Dam
The Portuguese Colonial Government constructed the Cahora Bassa Dam (See Figure 1), which
was finished in 1974. When completed, Cahora Bassa was the fifth largest dam construction in
the world, and considering the situation of the country at that time; this is an interesting aspect in
the history of the country:
That one of the world’s greatest civil engineering projects should have been undertaken in
the dying days of colonialism in one of the remotest and most backward regions of Africa
is an astonishing aspect of Mozambican, indeed of African history. 1
As the country became independent in 1974, the Marxist-Leninist party Frelimo took control of a
country devastated by warfare. Inspired by other communist countries, industrialisation became
the main focus of the new government, and Cahora Bassa became the country’s pride and a
symbol of progress. Even today the Cahora Bassa decorates the 100 000 Metical2
bank note,
symbolising prosperity and development.
1
Newitt, M. 1994: A History of Mozambique (pp. 528). Wittwaterstand University Press, South Africa.
2
Metical is the Mozambican currency; $US 1 equals approximately 21000 Metical.

5
Today the Zambezi River is considered as an engine
for the development of the Mozambican economy, in
fact the whole region sees the river as having a great
potential for the development of Southern Africa.
Mozambique had long been controlled by a brutal
Portuguese regime when the huge Cahora Bassa Dam
was built. Cahora Bassa was developed to provide
energy for the whole South African region, but it was
also a hope that the basin could function strategically
in the war of liberation, as a barrier in the way of the
Frelimo guerrilla3
. As Mozambique gained
independence in 1974, the power station at Cahora
Bassa also started producing energy. Only seven
months later the young state was thrown into a civil
war between the Frelimo Government and Renamo
rebels. Renamo launched series of terrorist attacks
against power lines, which had severe effects on the
energy production from Cahora Bassa. During the 15
years of civil war, Cahora Bassa did not produce any
energy, which in turn led to an enormous debt on the
Portuguese company HCB; even today the company
has a debt of 3 billion USD.
A peace agreement between Frelimo and Renamo was
achieved in 1992, which in turn led to a more stable
and predictable economic climate, and since then Mozambique has had a yearly economic growth
of approximately 8%. In order to continue this growth the government of Mozambique wants to
increase the energy production, primarily for export of energy to the international energy market
in southern Africa, but also to make the country more attractive for investments in energy
demanding industries. The Mepanda Unkua is considered as an important element in reaching all
these goals. Nevertheless, there are critical voices both in Mozambique and elsewhere claiming
that the costs of the project will be too high, in terms of negative environmental and social
consequences.
3
Newitt, M. 1994: A History of Mozambique. Wittwaterstand University Press, South Africa.
Figure 1: The large Cahora Bassa
Dam.

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1.2. Objective
The Association for International Water and Forest Studies (FIVAS)4
carried out a fieldwork in
Maputo and the project area in the period of June-July 2003. The main objective of the study was
to procure first hand information about the Mepanda Unkua project and the impacted area, in
order to get a better understanding of the consequences the project may have to the environment
and to groups of people who in different ways will be affected by the project. The principal
objective of the fieldwork was to visit the Mepanda Unkua area and the community from where
people have to move in case of a realisation of the project. FIVAS also wanted to investigate the
Norwegian activities and involvements in the project, to put a focus on Norwegian intentions and
responsibilities in the project.
4
The Association for International Water and Forest Studies (FIVAS) is an independent organisation working to
obtain and disseminate information about the impacts of large dams and hydropower projects in the Third World,
particularly where Norwegian interests are involved.
Figure 2: Location of Mepanda Unkua (Source: www.irn.org).

7
2. Methods
The study was carried out in two phases: First, information was collected through interviews with
different stakeholders in the project. Norconsult, a Norwegian private company advising the
Mozambican government on the development of the project, was the first institution that was
contacted for an interview, as a preparation for the visit to Mozambique. Among the most
important interviews made in Mozambique were: two interviews with representatives of the
Technical Unit for Implementation of Hydropower Projects (UTIP), which is a government
institution responsible for the development of the Mepanda Unkua project under the Energy
Department (DNE); one meeting with a representative of NORAD at the Norwegian embassy in
Maputo; and a meeting with Livaningo, an NGO which disseminates information about the
environmental and social consequences of the project. In addition we performed an interview
with a biologist, Dr. Arlindo Chilundo, at the University of Eduardo Mondlande, who for several
years has been working with biological and social consequences of dam constructions in the river
basin of Zambezi. (See Appendix 1 for more details on FIVAS’ activities during the study trip to
Mozambique).
Second, a minor fieldwork in the project area was carried out on July 3-11, 2003 in the Province
of Tete and in Mepanda Unkua. The fieldwork comprised visits to different areas and interviews
with potentially affected groups in Mepanda Unkua. The interviews were conducted with the aim
of getting first-hand knowledge about the lives and livelihoods of the affected people and to
assess the process of information sharing in the project. In addition, visits were made to Cahora
Bassa Dam and Songo (the resettlement village established in relation to the construction of the
Cahora Bassa), which also included talks with Hidroelectrica de Cahora Bassa (HCB), the
company that currently operates this dam.
The report is also based on a wide survey of technical, ecological, historical and cultural
literature.
The following chapter must be seen as important background information for the report.
Nevertheless, this part is based both on literature reviews and information gained through
interviews during the fieldwork. The chapters presents characteristics of the affected area, main
actors involved, and potential social and environmental consequences of the project.

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3. The Mepanda Unkua Dam Project
3.1 The Mepanda Unkua area
Mepanda Unkua is a very isolated area; neither extensive road networks nor other communication
networks to this area are developed. The projected damsite is located at Mepanda Unkua 70 km
upstream of Tete city, and the resulting reservoir will stretch out 60 km upstream to the foot of
Cahora Bassa and cover an area of approximately 100 km2
. The reservoir will also extend about
18 km upstream the Luia River, an unregulated river that drains a catchment of approximately 28
000 km2
. The dam wall will have a height of 101 m, being 445 m wide. The spillway is planned
to let infrequent major floods pass.
People in Mepanda Unkua rely mainly on agriculture
for their livelihoods, performing a shifting
cultivation and growing annual crops like sorghum,
millet and maize. The soils are sandy and shallow,
and unreliable rains make agriculture difficult for the
people living here. Many households supplement
agriculture with fishing, herding, bush cropping and
hunting. Hollowed logs function as fishing boats, and
nets are used to catch the fish. Livestock animals are
mainly goats; farmers have 1-15 animals, kept either
for food (milk and meat) or as a source of cash
income when selling animals in local markets. Many
farmers (according to the EIA5
approximately 40 %
of the population) also cultivate lowland fields along
the riverbanks of the Zambezi during the dry winter
season (May – November), growing crops like
tomatoes, onions, spring onions, lettuce, carrots, etc.
The proximity to the river makes these farm plots
reliable during the dry season and right before
harvest of highland fields in April-May. At the time
that FIVAS visited Mepanda Unkua, there was a
drought in the area, which made agricultural
production difficult and livelihood insecure for the
population, thus the lowland field production of
vegetables along the river represented the only
source of food for people in a difficult time.
3.2. Important actors: UTIP, NORAD and Norconsult
The feasibility study of the project was commissioned by UTIP (Technical Unit for
Implementation of Hydropower Projects). UTIP’s main objective is to implement technical
studies on - and follow up - the construction of hydropower projects on the Zambezi River.
According to the Director of UTIP, Nazario I. Meguigy, the role of UTIP is to secure the interests
of Mozambique in the process of developing the river:
5
UTIP 2002: Mepanda Uncua and Cahora Bassa North Project Feasibility Study, Environmental Impact
Assessment, Technical Unit for the Implementation of Hydropower Projects (UTIP).
Figure 3: Woman cultivating dry
season fields along the Zambezi.

9
“The construction of the Cahora Bassa Dam was a bad deal for Mozambique, and we [UTIP]
want to secure that this does not happen again.”6
The Norwegian Development Agency (NORAD) has over a period of three years supported UTIP
with 22 mill. NOK (approximately 3 mill. USD) earmarked for capacity building. The funding
was to be used for consultancy services and running costs.7
The main goal of NORAD’s support
to the Mozambican energy sector is “to improve the management of the energy sector to advance
sustainable social and economic development in Mozambique”8
. The agreement between UTIP
and NORAD has now expired and is currently (2003) being renegotiated9
.
In a tender between Norwegian companies in 1999, Norconsult won the contract for NORAD
consultancy assistance to UTIP, and has since then been key in advising the institution on
financial and technical matters. According to one of their representatives in Mozambique,
Norconsult has been a multidisciplinary consultant on environment, technical support, capacity
building, finance and law10
. Thus, the support from external consultants is quite extensive. The
Auditor General of Norway11
points out in a report that because UTIP still seems to be dependent
on external support from foreign consultants it is a fragile institution.
3.3. Possible social and environmental impacts of the project
Naturally, the building of a 1 348 megawatt (MW) dam with the following planned regulation
will affect both communities and the environment in Mepanda Unkua area. For the people in
Mepanda Unkua whose livelihoods rely upon a risky production environment, the planned project
represents an additional factor of insecurity. Displacement of people will also have social impacts
that are difficult to estimate. People will be cut off from the traditional social networks and local
markets. This will have consequences also for the remaining households that do not have to move
as a consequence of the construction scheme. At the same time the construction of the dam is
meant to have positive trickle-down effects in the affected local communities. According to
UTIP, possible skilled and unskilled local labour force will be used to the greatest extent possible
in the construction of the dam. Second, the construction will imply that infrastructure in terms of
roads and power grids will be developed, facilitating other economic activities in the area.12
In the following we will discuss some important aspects related to the building of the Mepanda
Unkua dam and possible social and environmental consequences that should be taken into
account.
6
Interview with Nazario I. Meguigy (Director) and Sergio J. Elisio (Engineer), UTIP, 15.07.2003.
7
Interview with Einar Ellefsen, Responsible for NORAD’s energy cooperation with the Government of
Mozambique.
8
NORAD 2003: Om bistand. www.norad.no/ombistand/oversikt, accessed 29.08.2003.
9
Mozambique, 24.06.2003.
10
Interview with Odd Ystgård, Norconsult, 07.05.2003.
11
Riksrevisjonen 2003: Effektiviteten av norsk bistand til Mosambik, Utkast til hovedanalyserapport 15.08.2003,
Riksrevisjonen, Forvaltningsrevisjonsavdelingen II, Seksjon F 2.4.
12

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Box 1: The Clean Development Mechanism (CDM)
The CDM was a result of the Kyoto Protocol under the UN
Framework Convention on Climate Change, and is often
described as the surprise of the negotiations. The idea
behind the CDM is that the industrialised countries can
comply with their own quantified emissions limitations by
investing in projects in countries that are not committed to
reducing emissions, and in this way contribute to
sustainable development in these countries. The
International Rivers Network (IRN) and CDM Watch have,
on the basis of the World Commission on Dams Framework
and CDM criteria, suggested guidelines for CDM and dam
projects:
1) Large-scale hydroelectric projects should not be granted
CDM funding.
2) An important principle of CDM is that emissions
reductions must be additional to what would occur
without the project. Thus, dam projects that would occur
without the CDM funding do not comply with the CDM
criteria.
3) The most conservative projections for emissions
reductions should be applied in the evaluation of the
projects.
4) Sensitivity analysis should be adopted to secure that the
developers do not exaggerate the energy effects and
understate the costs of the project.
Source:
IRN and CDM Watch, 2002: Why Big Hydro is Ruining the
Clean Development Mechanism.
http://www.irn.org/programs/greenhouse/021025.dammingt
hecdm.pdf
Options assessment and electricity supply
According to a feasibility study made by UTIP, several possible alternatives were considered for
the regulation of the Zambezi River13
. Cahora Bassa North, Boroma and Cambwe Foz were the
other alternatives considered, but the Mepanda Unkua was found to be the best solution.14
The
study says that without the Mepanda Unkua the outflush from Cahora Bassa would cause
devastating effects on the
environment. Fish species that
spawn in the dry season would
suffer because such an
outflush would carry the fish
eggs down the river. The study
also says that the Mepanda
Unkua will be a "buffer" for
the increased periodic outflow
of water from Cahora Bassa
after a construction in the
North Bank.15
This is the main
reason why Mepanda Unkua is
considered as being a better
alternative than Cahora Bassa
North.
Currently, one of the main
challenges for the developers
is to get investors into the
Mepanda Unkua project.
According to Norconsult16
, the
Mepanda Unkua Project is one
of the energy projects with the
highest revenue potentials in
the whole South-African
region; the costs of dealing
with the negative impacts of
the project are small
considering the total costs of
the project. Because the river
is already regulated upstream
of Mepanda Unkua, the project
is described as an
economically and
13
14
According to the study the Cahora Bassa North would probably be the economically best alternative, both in terms
of economic costs and in energy returns, but the environmental costs for this alternative have been considered as
being too high.
15
Interview with Dr. Arlindo Chilundo, University of Eduardo Mundlande, 15.07.2003.
16
Interview with Odd Ystgård, Norconsult, 07.05.2003.

11
environmentally cheap investment for Mozambique. Still, because of political and economic
uncertainties, it is currently (2003) difficult to find investors. The project has a total budget of
$US 2.5 bill, and the scale of the project makes it likely that only a large investor or an assembly
of investors will be interested. According to UTIP representatives, the Clean Development
Mechanism (CDM) is being considered as a potential financial source17
(See Box 1 for a
description of the CDM).
The construction period is estimated to be 6-7 years, and a private company (or consortium of
companies) will carry through the project and also operate the dam for 25 years. The construction
work and operation will be opened for tender internationally. After the initial 25-year period the
ownership of the dam will be transferred to Mozambique. In the meantime, the dam is meant to
benefit Mozambique in terms of taxes, stock dividends and royalties from the use of Mozambican
water resources18
.
According to Livaningo, Mozambique has several other options for producing more energy;
investments in small-scale decentralised energy projects, like solar, wind and gas, may offer
better alternatives for the rural areas in the country19
. This could to a higher degree help
achieving the national goal of 14 % of the population having electricity in 2015, and in addition it
would offer a better option concerning the environmental and social impacts of implementation.
Anne K. Helgestad of the Norwegian Water Resources and Energy Directorate (NVE), stated that
the problem with energy in Mozambique is not that of availability but rather of access to
electricity: the country produces enough electricity, but the problem is that people do not get
access to this electricity due to infrastructure problems. 20
As a consequence, energy prices are
too high, particularly in rural areas, but also for poor people urban areas. In fact the energy tariffs
in Mozambique are at the same level as in Norway, while the salary level is only a fraction of
Norwegian standards 21 22
.
The high energy prices are partly a result of a price agreement from the 1970s between
Mozambique and South Africa. During the history of Cahora Bassa, the major part of the power
produced has been sold to South-Africa. The agreement was renegotiated in 1984 during the civil
war, and the price was fixed at 4 cent of a Rand per kWh, which today, because of the drop in
value of the Rand, provides South-Africa with almost free energy. Mozambique on the other
hand, has to buy back their energy from South Africa at market prices. Portugal is willing to
transfer the ownership of the dam to Mozambique when the loan is paid back, which according to
HCB, will take at least 20 years with full production of energy. Mozambique now finds it
reasonable that the dam be transferred back to them for free, as a compensation for being
17
Interview with Arístides Baloi (Geographer) and António Chicachama (Engineer), UTIP, 26.06.2003.
18
19
Livaningo 2003: Mepanda Uncua. A bad deal for Mozambique? Is a new dam wise development choice?
Livaningo: Por um ambiente São, Maputo, Mozambique.
20
Interview with Anne Kronen Helgestad, NVE Representative in Mozambique, 31.06.2003.
21
According to UNDP Development Index has Norway a GNP per capita of 29.620 USD, whereas Mozambique’s
GNP per capita was calculated to be 1.140
22

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exploited by Portugal for centuries. The Mepanda Unkua plan may in fact be a way of pushing
the Portuguese to transfer the control of Cahora Bassa back to Mozambique23
. Thus, there might
be political reasons why further development of Cahora Bassa is not considered as being the best
solution.
A further development of Cahora Bassa will be the responsibility of HCB, who does not want to
invest in improvement of the spillways or the North Bank as long as the future is so uncertain.
Within the near future, the dam might have to be transferred back to Mozambique, and to HCB it
would not be a good investment to upgrade the dam right before a change in ownership.
Displacement
According to the feasibility study of Mepanda Unkua, 260 households involving 1 401 people
will have to move as a consequence of the planned regulation; these people have been registered
and listed manually, and mapped out by aerial photographing24
. The developers will be
responsible for compensating lost land and livelihoods for these people. According to the
Environmental Impact Assessment, 1 040 ha of highland and 33 ha of lowland agriculture areas
will be lost as a direct consequence of the dam construction. In addition, rangeland for livestock
and bushland for hunting and gathering will disappear. The project’s Terms of Reference states
that the people who have to move “…should be the long term beneficiaries of the project…”25
.
No detailed scheme on how this will be done has yet been developed; only options assessments
have been done26
. This includes only the people living in the reservoir area, and people that have
to move because of power line and road constructions are not included in these figures.
Environmental impacts
The environmental effects of the project are hard to estimate, but some of them are mentioned in
the Feasibility Study. Since the Mepanda Unkua will operate as a run-of-the-river dam, the
reservoir will appear as a slow flowing river. The daily fluctuations downstream at Tete will be
approximately 0,3-0,6 m. Potentially this can have negative impacts on fishing, cultivation along
the river and other human activities, such as bathing, washing of clothes and transport on the
river. 27
Regulating Zambezi downstream of Cahora Bassa implies that another tributary, the Luia River
will be regulated. This will further reduce downstream wetland soil fertility, potentially having
negative impacts on the prawn fisheries.28
23
24
25
UTIP 2002: Project Background, in Mepanda Uncua and Cahora Bassa North Project Feasibility Study,
Environmental Impact Assessment, Technical Unit for the Implementation of Hydropower Projects (UTIP): pp. 12.
26
UTIP 2002: Impact on Population and Resettlement, in Mepanda Uncua and Cahora Bassa North Project
Feasibility Study, Environmental Impact Assessment, Technical Unit for the Implementation of Hydropower Projects
(UTIP).
27
28

13
Among other potentially negative impacts of the Mepanda Unkua are poor water quality
downstream caused by the construction activities, and destruction of the African Mottled Eel
migration route.29
The Cahora Bassa dam had major negative consequences for the environment and for the people
in the area. Whether a new dam downstream will further worsen the situation or alleviate some of
the adverse impacts of Cahora Bassa is today an open question. Already in the 1980s some were
arguing in favour of a rehabilitation of the Zambezi flood regime by starting flood releases from
the Cahora Bassa. According to the feasibility study, a construction of the Mepanda Unkua will
reduce the feasibility of such a rehabilitation.30
In the following chapter, aspects of the Mepanda Unkua Project will be discussed in relation to
compliance with WCD standards, contribution to poverty reduction in Mozambique and CDM
financing. The WCD addresses several important issues in relation to construction of large dams,
and the chapter will therefore concentrate on the relation between Mepanda Unkua and WCD
recommendations.
29
30

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4. Findings and Discussions
4.1. Mepanda Unkua and the World Commission on Dams
According to the Feasibility Study of the Project, the World Commission on Dams’ (WCD)
Framework31
(see Box 2 for more details) is supposed to be the principal set of guidelines in the
development and planning of the project. Comparing the project to the WCD framework,
however, there seem to be flaws in important stages in the decision-making process, particularly
related to public acceptance and information sharing, as well as options and needs assessments.
A. Public acceptance
According to the WCD Framework, "Public acceptance of key decisions is essential for equitable
and sustainable water and energy resources development. Acceptance emerges from recognising
rights, addressing risks, and safeguarding the entitlements of all groups of affected people,
particularly indigenous and tribal peoples, women and other vulnerable groups"32
.
In the WCD report it is stated that good hydropower projects should ensure that certain elements
are in place in order to make due consideration of local and indigenous people’s concerns:
• Recognition of rights and assessment of risks is the basis for the identification and inclusion
of stakeholders in decision-making on energy and water resources development
• Access to information, legal and other support is available to all stakeholders, particularly
indigenous and tribal peoples, women and other vulnerable groups, to enable their informed
participation in decision-making processes
• Demonstrable public acceptance of all key decisions is achieved through agreements
negotiated in an open and transparent process conducted in good faith and with the informed
participation of all stakeholders
31
WCD: Dams and Development, A New Framework for Decision-Making, The Report of the World Commission on
Dams. www.dams.org/report/execsumm.htm, accessed 22.02.2003.
32
Box 2: The World Commission on Dams (WCD)
The WCD recognises that at the heart of the dams debate are issues of equity, governance,
justice and power. The main goal of the commission was to develop “…a rationale and
framework that responds to critical needs and offers scope for progress that no single
perspective can offer on its own”. Seven strategic priorities are recognised that should guide
and provide a practical way forward for decision-making:
1. Gaining public acceptance
2. Comprehensive options assessment
3. Addressing existing dams
4. Sustaining rivers and livelihoods
5. Recognising entitlements and sharing benefits
6. Ensuring compliance
7. Sharing rivers for peace, development and security

15
• Decisions on projects affecting indigenous and tribal peoples are guided by their free, prior
and informed consent, achieved through formal and informal representative bodies.
According to UTIP, several public hearings have been held at different stages in the project
planning. Based on the visit to the area it appears that this information has not been fully
comprehended by, or - even worse - been given to the affected people at all.
Today there seems to be an enormous knowledge gap between the developers and the local
affected people. Generally people do not know much about the project and its consequences, and
the consequences they are aware of are generally the positive ones like compensation and job
opportunities. The local people have generally not been involved in the planning and decision-
making process. Particularly affected people living downstream have been neglected in the whole
process. Today essential agreements are not in place for the signing of a construction contract
with potential investors.
The issue of compensation is, according to UTIP, "something a potential investor has to negotiate
with the locals"33
. UTIP representatives claim that their institution will ensure a proper
compensation for the people who will be relocated. There seems to be a need for capacity
building among the villagers on the issue of dealing with and negotiating over compensations,
and this must be secured before the final stages and a tender of the project.
It became clear during the study that the people living in the area only to a limited degree have
the capacity to participate in decision-making processes at any level. Livaningo and a local
organisation, VIDA34
, have started a capacity-building project for the affected people, which
hopefully will help them assess and defend their rights and participate in the decision-making
process in a more equal way. It might be difficult to involve local people at all stages of the
project planning, but the information given in this project does not comply with WCD standards.
All aspects and consequences of the project for the affected people have not been clearly shown.
In addition, the effects on communities and the environment downstream are not yet fully
investigated. WCD35
states that this is often a problem related to the construction of large dams,
as “…the failure to account for the consequences of large dams for downstream livelihoods have
led to the impoverishment and suffering of millions, giving rise to growing opposition to dams by
affected communities worldwide.“ The downstream environment in lower Zambezi was badly
affected by the construction of the Cahora Bassa. According to studies made, a rehabilitation of
the downstream environment is still possible by releasing tailor made environmental floods.36
With the construction of Mepanda Unkua, and particularly if this is followed by a development of
the Cahora Bassa North, a rehabilitation of the downstream environment and livelihoods will be
difficult.
33
Interview with Nazario I. Meguigy (Director) and Sergio J. Elisio (Engineer), UTIP, 15.07.2003.
34
VIDA (meaning "life" in Portuguese) is a local organisation working with health and environmental education,
focussing on local communities in the Province of Tete.
35
36

16
B. Comprehensive Options assessment - validating the needs and addressing existing dams
The planning of the Mepanda Unkua hydropower project has raised discussions concerning the
need for the project. It is clear that today there is no acute need for more energy in the
Mozambican domestic market37
. The capacity of the Mepanda Unkua will be 1 348 MW, and
considering the current domestic demand for energy of 200-250 MW, it becomes obvious that the
energy gains from this project are not designed according to the current domestic energy
consumption level. According the Feasibility Study, if the planned industrial development of the
country is to succeed, Mozambique is in need of 2700 MW additional capacity38
, an important
argument for realising the project. These numbers are uncertain, and probably based on optimistic
prognosis of the national industrial development in the country. In addition, it is stated that South
Africa in the future (from 2007) will have an energy deficit. Other neighbouring countries like
Zimbabwe and Malawi are also countries in need of energy.39
Seen both from a national and a
regional point of view, the dam might have some positive effects for the energy supply. But
whether the project will contribute to alleviating poverty in the country and address the question
of equity, is still an open question (this will be discussed further in section 5.2). There are no
indications that Mepanda Unkua will make a direct contribution to increasing the supply of
energy to marginal areas of the country.
Considering the selection of alternatives (mentioned above), the choice of Mepanda Unkua
project is questionable. The average production of Cahora Bassa is currently far below installed
capacity (about 30 % in June 200340
). The power potential of Cahora Bassa could also be doubled
if the station is upgraded. Even the EIA considers a spillway enlargement of the existing Cahora
Bassa as being the best alternative. This could also lead to a partial restoration of the natural
flood conditions downstream during the wet season. Still, it should be noted that in the
international debate the potential positive effects of tailor made floods are controversial41
.
As an upgrading of the existing Cahora Bassa is the responsibility of the owners of the dam, it
was not considered as a viable alternative42
. Thus, both the need assessment and the selection of
the Mepanda Unkua among other alternatives are questionable according to WCD standards.
4.2. NORAD support to UTIP - addressing poverty?
The developers claim that the Mepanda Unkua hydropower dam will increase the national
income and by that contribute to alleviating poverty in the country. The general objective of all
NORAD activity is also to contribute to the international work in combating poverty. The main
goals are durable improvements in economic, social and political conditions for the populations
in developing countries, with a special focus on helping the poorest segments of the
37
Interview with Anne Kronen Helgestad, NVE Representative in Mozambique, 31.06.2003.
38
39
Mozambique, 24.06.2003.
40
According to HCB officials this was due to ongoing maintanance work.
41
Concerns about environmental flows are presented in e.g. McCully, 2001: Silenced Rivers. Zed Books. See
www.irn.org
42

17
populations43
. In a recent preliminary report from The Auditor General44
it is pointed out that the
grant document from NORAD to UTIP does not say anything about how the Mepanda Unkua
Project will contribute directly or indirectly to alleviating poverty in Mozambique. Economic
growth in itself does not reduce poverty, and as the report states, how the income from the energy
production will benefit the poorest segments of the population will in turn depend on “the social
profile of future national budgets”. The report suggests that the Mepanda Unkua contribution to
alleviating poverty in Mozambique is highly uncertain.
4.3. CDM Funding
Currently the main problem faced by UTIP is to find potential investors to the project. As it is
stated both by the planners and consultants in UTIP that the project is highly economically
viable, we find it very unlikely that the project will comply with the criteria for CDM projects.
An inherent paradox of the CDM is that the more cost-effective, the more uncertain the
additionality45
.
Another factor making Mepanda Unkua even less suitable for CDM is the highly uncertain
projections in domestic reductions in emissions of greenhouse gases as a consequence of the
project; because the project is planned as a capital generating project for the country by exporting
electricity to neighbouring countries in the region, the domestic energy gain from the project is at
best moderate.
43
NORAD 2003: Om bistand. www.norad.no/ombistand/oversikt, accessed 29.08.2003.
44
45
Grubb, M., Vrolijk, C. and Brack, D. 1999: The Kyoto Protocol. A Guide and Assessment. The Royal Institutre of
International Affairs, Energy and Environmental Programme, London.

18
5. Conclusions and Recommendations
The findings from the study enable FIVAS to make some conclusions and recommendations for a
further development of Mepanda Unkua and the energy sector in Mozambique:
• Demand side management, supply efficiency and decentralised energy alternatives may
offer better alternatives for improving energy services for all segments of the population
in Mozambique, and should be investigated further with the support of international
donors.
• Extensive capacity-building and inclusion of all stakeholders in the decision-making
process is essential for fulfilling the guidelines for good practice developed by the World
Commission on Dams, claimed by UTIP to be among their most important guiding
principles in the planning process of the Mepanda Unkua project.
• Capacity-building among affected groups should be carried through or encouraged and
supported by the implementers (UTIP).
• Even though an important principle in NORAD’s co-operation is the recipient country’s
responsibility, support from NORAD to UTIP as a governmental institution should be
revised. The social profile of the Mepanda Unkua project should be changed to the benefit
of the affected groups in the impacted area and the poor segments of the population in
Mozambique.
• CDM funding should not be granted to this project, as it is considered as being amongst
the most economic viable energy projects in the whole region, and therefore does not
fulfil the additionality criteria of the CDM. In addition, the project’s contribution to
domestic reduction of GHG gases and sustainable development is highly uncertain.

19
Appendix 1: List of interviews and meetings
May 7th
Odd Ystgård, Norconsult
June 24th
Einar Ellefsen, NORAD
Anabela Lemos and and Maurício Sulila, Livaningo
June 26th
Arístides Baloi (Geographer, UTIP) and António Chicachama (Engineer, UTIP)
June 31st
Anne Kronen Helgestad, Norges Vassdrags og Energiverk (NVE)
July 3rd
– 11th
Fieldwork in Tete Province
July 12th
Anabela Lemos and Lucia Scodanibbio, Livaningo
July 15th
Nazario I. Meguigy (Director, UTIP) and Sergio J. Elisio (Engineer, UTIP)
Dr. Arlindo Chilundo, University of Eduardo Mondlande
July 17th
Lote Simione Maueia, Head of Environmental Impact Assessment Department (MICOA)

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