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Government and International Agencies Update Financing Conditions for LNG

Government and International Agencies Update Financing Conditions for LNG

The Mozambican government and the International Agencies that are funding the liquefied natural gas (LNG) operations in the northern province of Cabo Delgado have met to update the financing terms in order to resume the projects.

The agencies in question are the Export-Import Bank of the United States (US Exim), the Japan Bank for International Cooperation (JBIC), the African Development Bank (AfDB), NEXI from Italy, KEXIM from Korea, Atradius from Holland, Thai Exim from Thailand and SACE from Italy.

The meeting had a duration of three days and an attendance of over 70 people representing the agencies.

The Mozambique LNG project is the first onshore development of a liquefied natural gas plant in the country. The project includes the development of the Dolphin and Tuna fields, located in Offshore Area 1 of the Rovuma Basin, and the construction of a plant with two liquefaction units with a capacity of 13.12 million tonnes per year (MTPA).

The project, headed by the French company TotalEnergies, in the Cabo Delgado district of Palma, is budgeted at 23 billion dollars, easily the largest foreign investment in Mozambique to date. However, it was interrupted in 2021 when Islamist terrorists attacked Palma town.

According to the Minister of Economy and Finance, Max Tonela, the update of financing terms is important so that TotalEnergies may resume the project.

“Credit agencies are essential in this process because they guarantee the resumption of activities on time”, he said, cited in Wednesday’s issue of the Maputo daily “Notícias”, adding that this project is a landmark in the history of Mozambique and Africa, as it will contribute to energy security at a moment when the world is facing an unprecedented crisis.

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According to Tonela, the start of natural gas exploration by the floating platform Coral Sul, over the last year, marked a new era for the country and, taking into account the proposed creation of a Sovereign Wealth Fund, “we are on good track for transparent economic management.”

“I believe that LNG plays and will continuously play an important role in fuel transition. Mozambique will contribute to this transition”, he said.

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