The African Development Bank (AfDB) has finalized a US$400 million bid to assist in the financing of the Mozambique Liquified Natural Gas (LNG) Area 1 Project off the coast of Cabo Delgado province in the north of the country. AfDB joins a cohort of international financial backers on the project, estimated to cost US$20 billion. French multinational company Total has secured a senior debt financing facility worth US$14.9 billion, making it the main investor in the project.
The successful financing of the project signals trust in the government of Filipe Nyusi
The Mozambique LNG Area 1 Project is the single largest foreign direct investment project on the African continent, involving Export Credit Agencies from the United States, South Africa, Italy, Thailand, the Netherlands, the United Kingdom, and Japan, according to a statement Total released last week. Set to be operational by 2024, the plant is expected to generate up to 13.1 million tons of liquified natural gas per year. It’s hoped that the wealth generated by the plant will improve economic fortunes for the people of Cabo Delgado, where poverty is severe.
The successful financing of the project signals renewed trust in the government of Filipe Nyusi, whose administration has been embroiled in a major scandal over loans Swiss bank Credit Suisse helped to arrange for development in Mozambique, which involved kickbacks worth millions of dollars. It also indicates that persistent violence committed in the region by Islamist insurgents has not discouraged major international investors.