Mozambique: South Korea Eximbank Provides USD500 Million Funding for Total’s Mega Gas Project

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  • The Export-Import Bank of Korea ย (Korea Eximbank) announced on December 10 that it would provide USD 500 million in project financing for the Mozambique Offshore Area 1 Project.ย 
  • Daewoo E&C and a goup of SMEs participate in the project as they received the plant order worth USD 550 million.
  • The project financing fund will be spent as the companiesโ€™ construction costs and it is expected to create 1,300 new jobs annually and promote foreign exchange earnings.

The project is sponsored by eight companies including Total and a state-run petroleum company of Mozambique to build and run two LNG plants by developing gas fields and the produced natural gas will be sold on long-term contracts.

The total project cost is USD 23.5 billion and the annual LNG production volume is estimated at 12.9 million tons.

Related news: Total evacuates workers from Afungi LNG plant in Mozambique

A group of eight export credit agencies have joined the project across the globe, including Korea Eximbank, the Export-Import Bank of the United States, the Japan Bank for International Cooperation and SACE from Italy.

Considering two Korean shipbuilders โ€• Hyundai Heavy Industries and Samsung Heavy Industries โ€• are now in negotiations for orders to build 17 LNG ships worth USD 3 billion, it is expected the project finaning will help Korean shipbuilders win the LNG ship orders.

Korea Eximbankโ€™s participation in the project is meaningful in that it laid the foundation for Korean SMEs and medium-large companies to enter the African market with huge growth potential where a number of countries are resource-rich.

Korea Eximbank has been making continuous efforts to support Korean firms to enter the African natural resources development market. Back in 2017, the bank offered project financing for the 4 gas field development project in Mozambique where Samsung Heavy Industries and Korea Gas Corporation participated. Last year, it provided financial support for Daewoo E&C to receive order for the NLNG natural gas liquefaction plant construction project.

“Despite the lingering challenges, such as the spread of COVID-19, the global economic downturn and reduced orders, we expect our financial assistance to raise Korean companies’ global competitiveness in emerging markets to secure orders,” a Korea Eximbank official said.

Author: Bryan Groenendaal

Source: Korea Eximbank

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