MAPUTO, Mozambique 4/12/12 (PennWell) -- Government officials have signed an agreement that will put 100% control of Hidroelectrica de Cahora Bassa in Mozambique hands, sources report.

HCB operates the 2,040-MW Cahora Bassa hydroelectric plant on the Zambezi River.

Until 2007, Portugal held the majority of HCB with an 82% share, though an agreement worth about US$700 million left Mozambique with 85% control and Portugal the remainder.

Under the newest arrangement -- signed by Mozambican president Armando Guebuza and Portuguese prime minister Pedro Passos Coelho earlier this week -- the transaction will take place in two stages.

Mozambique will acquire the first half of Portugal's 15% share in September at a cost of $42 million. The remaining 7.5% will then pass through the hands of Portugal-based Redes Energeticas Nacionais, which operates the Portuguese national electrical grid. REN will then relinquish its holdings in HCB in exchange for shares in a yet-to-be-established company that will operate a new transmission line in Mozambique.

That transmission line, known as the Centre-South (CESUL) project, will eventually augment the country's existing lines and allow for new hydroelectric plants at Mepanda Mkua and a second powerhouse at Cahora Bassa.