$400 Million Senior Loan Granted by AfDB to Mozambique to uphold the the Building of an Integrated Liquefied National Gas Plant and Liquefaction Facility
By Abdul Rahman Suagibu –
NEW AFRICA BUSINESS NEWS, Freetown, Sierra Leone- MOZAMBIQUE, African Development Bank Group (AfDB) through its Board of Directors has confirmed a long-term Senior Loan of $400 million to support the building of an integrated Liquefied Natural Gas (LNG) plant; including a liquefaction facility in Mozambique.
The Mozambique LNG Area 1 Project is ranked as Africa’s single largest Foreign Direct Investment to date, comprises a global team of energy developers and operators led by Total alongside Mitsui, Oil India, ONGC Videsh Limited, Bharat Petroleum, PTT Exploration, and Mozambique’s National Oil and Gas Company ENH.
The AfDB’s beweds a global syndicate of commercial banks, development finance institutions, and export credit agencies, to jointly provide the necessary senior debt financing for the project. Financial close is anticipated within the first half of 2020.
Bank Group President – Akinwumi Adesina said: “Through its participation, the African Development Bank again demonstrates its leading role in supporting Africa’s transformation. The catalytic effect brought about by the Bank is strategically aimed to help transform Mozambique from ‘developing’ to ‘developed’ nation.”
“Working closely with the Government of Mozambique, we can ensure that the local population reaps the benefits from its nascent natural gas value-chain, thus creating growth opportunities and widespread industrialization, while at the same time accelerating regional integration across Southern Africa,” Adesina noted.
In June 2019, group of investors reached at a final investment decision on the project, which carries a price tag in excess of $20 billion, facilitating the incipient commercialization of one of the world’s most important gas discoveries in the past two decades.
The LNG liquefaction plant will have a production capacity of 12.88 MTPA. The project is the first of several LNG trains expected to undergo development in the northern part of the country
Mozambique is expected to become one of the world’s largest LNG exporters and its gas represents an important source of supply diversification, which stands to benefit global energy markets.
Upon approval, the Bank bears an official command to see to it that; the project faithfully support to international transparency standards and full compliance with environmental and social requirements, in partnership with its Integrated Safeguards System.
In addendum, AfDB’s participation introduces key social and economic manifestations into the loan monitoring, including areas such as job creation, gender empowerment, and linkages for small businesses. With a portion of the gas allocated to the domestic market, the Bank’s focus is on supporting economic diversification and industrialization in both Mozambique and across SADC.
The Bank’s involvement is consistent with its country strategy in Mozambique, to use natural resources development to expedite socio-economic agricultural transformation and investment in sustainable infrastructure.
For New Africa Daily News Abdul Rahman Suagibu Reports, Africa Correspondent