AfDB approves R5.9bn to support Mozambique LNG project
Johannesburg - The African Development Bank said on Tuesday it had approved a long-term senior loan of $400 million (about R5.9 billion) to support the building of an integrated liquefied natural gas plant, including a liquifaction facility in Mozambique, which is expected to become one of the world’s largest LNG exporters.
In a statement, the AfDB said the Mozambique LNG Area 1 project, ranked Africa’s single largest foreign direct investment to date, comprised a global team of energy developers and operators, led by Total alongside Mitsui, Oil India, ONGC Videsh Limited, Bharat Petroleum, PTT Exploration, as well as the country's national oil and gas company ENH.
The bank joins a global syndicate of commercial banks, development finance institutions and export credit agencies to jointly provide the requisite senior debt financing for the project. Financial close is expected within the first half of 2020.
The group of investors reached a final investment decision in June on the project, which carries a price tag in excess of $20 billion, thereby facilitating the initial commercialization of one of the world’s most important gas discoveries in the last two decades.
"Through its participation, the African Development Bank again demonstrates its leading role in supporting Africa’s transformation," AfDB president Akinwumi Adesina said.
"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."
The LNG liquefaction plant will have a production capacity of 12.88 metric tonnes per annum and the project is the first of several LNG trains expected to undergo development in the northern part of the southern African country.