MAPUTO, Nov 27, 2007 (AFP) - Mozambique on Tuesday formally took over from Portugal the control of Cahora Bassa hydroelectric dam, Africa's second most important after that of Aswan in Egypt.

'The control of the dam signifies for us the elimination of the last vestiges of European colonialism in Africa,' Mozambican President Armando Guebuza said before a crowd of 10,000 people who witnessed the event, broadcast on national television.

Heads of state from Zimbabwe, Botswana, Zambia and Malawi were present at the ceremony, which took place at the site of the dam in Songo, in the country's central Tete Province.

Control of the dam is expected to fetch the African nation more than 150 million dollars (101 million euros) annually.

'From these 150 million dollars a year, we are going to pay over 15 years a loan of 700 million dollars (471 million euros) from a Franco-Portugal Calyon/BPI bank consortium taken to buy the part of capital held by Portugal,' Energy Minister Salvador Namburete told AFP.

'A part of the revenues (10 percent) derived from the sale of power from the dam to neighbouring countries would fuel the state economy,' he said.

Since the country gained independence in 1975, the Cahora Bassa dam was 82-percent owned by former colonial power Portugal, while Mozambique held the remainder.

After paying 700 million dollars to Portugal -- the last slice of a total of 950 million dollars fixed following accords signed between the two countries last year -- Mozambique has recovered 85 percent of the dam's capital, with 15 percent still left with Portugal.

Besides Mozambique, the dam, which has a capacity of 2,000 megawatts, will supply electricity to South Africa and Zimbabwe. The construction of high tension lines is underway to provide power also to Malawi, Tanzania and Zambia.

South Africa was represented at the ceremony by its deputy foreign affairs minister, Sue van der Merwe, while Swaziland was represented by prime minister Themba Dlamini. Portuguese Finance Minister Manuel Teixeira dos Santos attended.

Built between 1969 and 1975, it was paralysed during the country's civil war (1976-92) following acts of sabotage by RENAMO (National Resistance of Mozambique) rebels.

Later put in order, it became Africa's most important hydroelectric dam in infrastructure and second after that of Aswan in Egypt due to its artificial lake size of 2,700 square kilometres.