The Sovereign Fund of Mozambique (FSM) plans to accumulate savings for future generations, based on revenues collected from oil and natural gas projects in the country.
“In its governance structure, it is intended that the Fund makes full use of the existing institutions in the country, guided by the principles of good governance, transparency, accountability, independence and inclusion, in line with international best practices,” said the draft law creating the FSM, approved by the Council of Ministers and quoted on Monday, 31 July, by Lusa.
In the document, the Government recalls that within the scope of research activities carried out in Areas 1 and 4, offshore the Rovuma block, huge deposits of oil and non-associated natural gas were discovered, estimated at around 180 trillion cubic feet.
In this context, the operators and partners of Areas 1 and 4 submitted three natural gas liquefaction projects, already approved, namely the Coral South Liquefied Natural Gas FLNG, offshore, the Golfinho/Atum Liquefied Natural Gas and the Rovuma LNG.
Of these projects, the Coral Sul FLNG is highlighted, which started natural gas production in the last quarter of 2022 and which, in addition to generating significant opportunities for the development of national companies, its exploitation will generate direct profits for the State.
At the same time, the same document highlights that research work is underway in five oil and gas exploration and production concession areas, located in Angoche and the Zambezi delta, with even greater benefits expected in the event of a commercial discovery.
However, in order to maximise the gains from the exploration and development of these non-renewable natural resources, and looking at the high volatility that characterises their prices in the markets, the Government reiterates that the creation of the GSF is of paramount importance.
“The draft law that creates the Fund aims to contribute to leveraging the country’s economic and social development, bring stabilisation to the State Budget and accumulate savings for future generations, through the collection of revenues from oil and natural gas exploration and those resulting from the respective investments”.
The document also adds that “the WSF should invest in assets other than the oil and gas sector, also assuming that these investments should be made on the basis of the policy approved by the Government”.
It is also defined “the prohibition of the use of WSF resources to grant guarantees for the contracting of loans by the State or other entities, to finance political and party activities, as well as for the payment of debts and debt service without going through the State Budget”.
The FSM will be managed by the Bank of Mozambique, but under the scrutiny of the Assembly of the Republic, the Government, the Supervisory Committee and the Investment Advisory Board.
