USD 20 Billion Gas Project Massive Game Changer for Mozambique

  • “The signing of the financing for Area 1 LNG (liquefied natural gas) in Mozambique heralds a new era of industrialisation for the country and the rest of the region,” a statement by the AfDB’s director of Industrial and Commercial Development, Abdu Mukhtar, says.
  • The project, worth US$20 billion (€17.5 billion), is the largest private investment underway in Africa.
  • “The costs of the project will be financed through a combination of equity and loans,” the AfDB says.

The loans that the Area 1 consortium has been signing in recent weeks with financiers total US$16 billion (€14 billion), of which the AfDB is contributing US$400,000 (€350,000).

Various export credit agencies are participating in the operation, such as the North American US-EXIM, the Japanese JBIC bank, the British UKEF, Thai EXIM of Thailand, Japan’s NEXI, SACE of Italy, the South African ECIC, Atradius of the Netherlands and other commercial banks.

“AfDB’s investment in Area 1 represents the bank’s largest investment in project finance in Africa,” Mukhtar adds.

The director general of Total in Mozambique, Ronan Bescond, a month ago called closing the financial project in the current situation “a memorable feat”.

The French oil company is holding to 2024 as the deadline for the first delivery of LNG. Full production of 13.12 million tons per year is expected to be achieved in 2025.

The consortium has already closed sales contracts mainly with Asian markets (China, Japan, India, Thailand and Indonesia), but also European, through Electricity of France, Shell and the British company Centric.

Total leads the Area 1 consortium with a 26.5%, alongside the Japanese Mitsui (20%) and the Mozambican state oil company ENH (15%), with share further participation by the Indian NGO Videsh (10%) and its subsidiary Beas (10%), Bharat Petro Resources (10%), and Thai PTTEP (8.5%).

Author: Bryan Groenendaal

Source: LUSA 

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