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Portuguese Government Signs Agreement in Maputo Providing EUR 400M in Guarantees for Investments in PALOP Countries

Portuguese Government Signs Agreement in Maputo Providing EUR 400M in Guarantees for Investments in PALOP Countries

The Portuguese government will formalise in Maputo an agreement called “Compacto Lusófono” (Portuguese-Speaking Compact), which involves guarantees of around 400 million euros for economic cooperation with Portuguese-speaking African Countries (PALOP).

This will be one of the main agreements closed during Prime Minister António Costa’s stay in Maputo (on Thursday and Friday), and will be signed on the sidelines of the 5th Luso-Moçambican Summit in Maputo.

“We hope to be able to sign, on the sidelines of this summit, an important agreement that makes the Lusophone Compact viable – an agreement that allows guarantees worth 400 million euros for investment in the PALOP. It does not apply only to Mozambique, although this country has a very significant expression in the context of the PALOP countries and will certainly have many opportunities,” through this programme, the Secretary of State for Foreign Affairs and Cooperation, Francisco André told Lusa news agency.

The Lusophone Compact is an initiative launched in late 2017 by the African Development Bank (ADB) and the Portuguese government to finance projects launched in Lusophone countries with the financial support of the ADB and with guarantees from the Portuguese State, which thus ensure that the cost of financing is lower and with less risk.

The main aim of the initiative is to boost private sector development in the six Portuguese-speaking African countries – Angola, Guinea Bissau, Cape Verde, Mozambique, Sao Tome and Principe and Equatorial Guinea – via three instruments: risk mitigation to unlock investment, direct funding of private investment and technical assistance to boost private sector growth.

The division will be made taking into account the projects presented, according to a government source, without specifying the amount for each country.

António Costa’s programme in Mozambique, in addition to the political and institutional component, will include a business and investment forum – an economic seminar aimed at bringing Portuguese and Mozambican companies closer together and creating opportunities for joint work.

“Portuguese companies have always been present in strategic sectors and there is a great desire to create increasingly better conditions, a good atmosphere, for investment and for Luso-Mozambican partnerships. We want to encourage businesspeople from both countries to take advantage of the investment opportunities that exist in Mozambique and Portugal,” said Francisco André.

The Secretary of State said that the sectors “fundamental to the Mozambican economy are energy, infrastructure, agri-food, financial services and banking.

“This seminar serves to demonstrate the capacity and resilience of Portuguese companies, which have always been present in Mozambique over the years, when it was easier, but also when it was less easy. Portuguese companies have always resisted, never abandoned Mozambique and have always worked together with their Mozambican partners,” he said.

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André then noted the “good prospects” for business opening up in the Mozambican market, particularly in terms of natural gas.

“It is expected that there may be a period of economic expansion in Mozambique,” he said.

In this way, for the Secretary of State for Foreign Affairs, “we need to encourage, create incentives and review the financial instruments that already exist today to support Portuguese companies and their investment in Mozambique.

“We will review two already existing funds, making their use easier in order to generate more synergies between the two countries in the economic field,” he added.



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