The International Bank of Mozambique (Millennium bim), one of the largest in the country, and the National Hydrocarbon Company (ENH) signed this Tuesday, 1 August, in Maputo, a memorandum of understanding that aims to define the conditions of access to the bank’s products to leverage the financial capacities of Small and Medium Enterprises (SMEs) in the oil and gas sector.
With this step, Millennium bim will start financing SMEs with participation in oil and gas projects, aiming to enable this segment to take advantage of the opportunities created in hydrocarbons.
“The partnership with Empresa Nacional de Hidrocarbonetos (ENH) is a very important initiative for Millennium bim, since, through this memorandum of understanding that we signed today, we will grant special conditions of access to our financial products and services to SMEs previously identified within the scope of ENH’s Linkar Programme”, explained the Chairman of the Executive Committee of Millennium bim, João Manuel Martins.
Created by ENH and launched in 2022, the LINKAR program aims to promote the development of national SMEs in the Oil and Gas industry through technical assistance, capacity building, institutional support, certification and standardization of processes, as well as through the identification of opportunities for business linkages and the signing of contracts for the provision of services. The program already has about $1.5 million disbursed by the African Development Bank (AfDB).
The official said that the objective is to support SMEs, allowing them to actively participate in the development of the oil and gas sector and contribute to the country’s economic growth. “In this way, we will also be promoting local content, an aspect that we consider strategic. Through this partnership, we are aligned with ENH’s Linkar Programme, which has the central vision of stimulating the linkages of production processes between SMEs and the major projects currently underway in the oil and gas sector in Mozambique,” he pointed out.
Recognising that the cost of money is high in Mozambique, Martins said that “the bank will try to place its financing at a competitive price so that SMEs take advantage of the opportunities offered by the oil and gas sector. In the financial sector you cannot grow by charging high rates, [so] we will try to practise the lowest rates”.
In turn, the president of ENH, Estêvão Pale, considered it important to strengthen the financial capacity of Mozambican SMEs to be able to participate in hydrocarbon projects, taking into account the high level of demand imposed by multinationals in the industry.
“In our view, the contribution of the oil and gas industry to the economy should not take into account only the participation of the State, as it is important the participation of the national private sector in the industry, in particular SMEs, which constitute the vast majority of operators in the national private sector”, defended Estêvão Pale, considering that “the oil and gas area is very demanding and national companies need to be empowered, not only in technical terms and standards, but also in terms of financing”.
The agreement signed between Millennium bim and ENH is valid for five years and the amounts will be made available according to the needs and repayment capacity of the beneficiary companies.
In the first half of this year, Millennium bim’s consolidated profits increased 3.2% year-on-year to 3.3 billion meticais (€47.9 million).
As of 30 June, the bank had a share capital of 4.5 billion meticais (€64.1 million), the majority held by BCP Africa (Millennium BCP group), with a 66.69% stake, followed by the State of Mozambique (17.12%), the Mozambican National Social Security Institute (4.95%) and the Mozambican Insurance Company (4.15%), among other shareholders.
