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MMEC 2024: Energy Sector Needs Banking to Grow

MMEC 2024: Energy Sector Needs Banking to Grow

Mozambique is going through two crucial moments in the history of its development: on the one hand, it is seeking to maximise all opportunities to exploit its abundant mineral resources; on the other, it is facing pressure from international agendas advocating the need to move towards the use of clean energies. And with this, there are many initiatives being taken by the authorities and partners to take advantage of both sides.

In this context, institutions such as commercial banks are trying to reconcile the two sides by offering credit services to make existing projects viable. Absa Bank Mozambique’s Corporate and Investment Banking Director, Patrícia Darsan, shared the financial institution’s experience in financing companies operating in the oil and gas and energy sectors while seeking to mitigate their CO2 footprint.

Speaking last Thursday, May 2, on one of the panels at the 10th edition of the Mozambique Mining and Energy Conference and Exhibition (MMEC 2024), she explained that oil and gas projects require significant investments and commercial banking alone does not have the capacity to support them, but ‘we have to have partnerships with multilateral organisations and development institutions, so that national banks can be present and participate in these development projects’.

‘In this vein, there is also a need for us, as a financial sector, to think about this issue of energy transition and position ourselves to support companies and authorities in this issue of changing resources and looking for cleaner ones,’ said Patrícia Darsan, emphasising that ‘the commercial bank also has to position itself in this area. ‘We have to be very proactive in responding to the various demands made by the market.’

The head of Absa Bank also recognised that agriculture also plays a very important role in the development of the economy.

‘That’s why we believe that, in fact, Mozambique has great potential and opportunities in the coming years to develop and position itself in the region as a major development partner. The financial sector cannot ignore this factor and must be positioned in a way that can support the value chain, not just oil and gas, but also the other value chains of the economy as a whole.’

Patrícia Darsan

‘We are very involved with the oil and gas sector in particular, and with the relevant sectors of the economy. We have a team at the bank that understands the sector and seeks to provide the most effective solutions according to the various objectives along the oil and gas value chain and the energy sector value chain,’ she emphasised, stressing that ’our role as a commercial bank in Mozambique is also to support the development and sustainability of Mozambican companies, looking very much at local content. We have developed some partnerships in this direction.

Patricia Darsan revealed that Absa Bank is committed to ensuring that Small and Medium Enterprises (SMEs) earn enough money to become a relevant sector and can support the country’s economy, not only in terms of services for the oil and gas value chain, but also in the various critical sectors of the Mozambican economy.

‘We are very committed, in fact, to ensuring that we can empower SMEs so that they can actually win contracts with the big projects. We are positioned to be able to create the necessary conditions so that the projects that are underway and the future ones that are coming can, in fact, be supported.’

Patrícia Darsan

The need for a just energy transition

On the panel ‘Unlocking Mozambique’s LNG Potential: Promoting Optimal Investment across the Gas Value Chain’, Diego Masera, regional representative (Southern Africa) of the United Nations Industrial Development Organisation (UNIDO), explained: ‘we have to ensure that the transition is made in a way that benefits the majority, especially when we live in a country where 70% of the population has no access to electricity’.

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For the source, the transition must be made, but it must be guided by the principle of sustainable development and must give people access to opportunities. ‘This requires an effort from all the partners gathered here today. This is not just the LNG market; we are working together for the development of the Southern African region and also for sustainable development in general for the world,’ he concluded.



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