Maputo - Portugal on Tuesday handed over its controlling stake in one of Africa's largest dams to former colony Mozambique after tortuous negotiations spanning more than three decades.
The pact, signed by Mozambican President Armando Guebuza and Portuguese Prime Minister Jose Socrates in the town hall of the capital, gives Mozambique control of an 85-percent stake of the Cahora Bassa dam on the Zambezi river.
Portugal is reducing its stake in the complex - one of Africa's largest hydro-electric projects - to 15 percent from the current 82 percent for $950-million.
Under the deal, Mozambique could also ask Lisbon to sell a further five percent stake in the dam to a group selected by Maputo.
Guebuza hailed the pact, saying it "symbolises a new stage in bilateral relations" and the southern African country's "second independence".
The Portuguese prime minister said the pact stood at the "confluence of the past and the future of Mozambique".
Located on the Zambezi River, the dam has created a 2 000-square-kilometre artificial lake which stretches to the point where the borders of Mozambique, Zambia and Zimbabwe converge. It produces 2 000 megawatts of power annually.
Construction of the dam began in 1969 while an armed independence struggle was under way in Mozambique. The dam went into operation in 1978, three years after Mozambique gained independence from Portugal. - Sapa-AFP