The African Development Bank (AfDB) has approved a $400m loan to support the construction of an integrated liquefied natural gas (LNG) plant and a liquefaction facility in Mozambique.
The Mozambique LNG Area 1 Project is led by Total and consists of a global team of energy developers.
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Other partners in the project are Mitsui, Oil India, ONGC Videsh, Bharat Petroleum, PTT Exploration, and Mozambique’s national oil and gas company ENH.
With the approval of the long-term senior loans, the bank is joining a global syndicate of commercial banks, development finance institutions and export credit agencies to provide senior debt financing for the project.
Financial close of the project is expected within the first half of next year.
Furthermore, the bank’s participation introduces key social and economic indicators into loan monitoring in areas such as job creation and gender empowerment.
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By GlobalDataAfrican Development Bank Group 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 industrialisation, while at the same time accelerating regional integration across southern Africa.”
The partners reached a final investment decision (FID) in June to invest more than $20bn in the Mozambique LNG project, allowing the initial commercialisation of the project.
With a production capacity of 12.88Mtpa, the LNG liquefaction plant will be the first of several LNG projects expected to undergo development in the northern part of the country.
The LNG project has already signed eight long-term off-take contracts with LNG companies, including Bharat, Centrica, Chinese offshore oil and gas producer CNOOC, Taiwan’s CPC Corporation, Electricite de France EDF, JERA, Pertamina, Shell, Tohoku Electric, and Tokyo Gas.
