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African Development Bank set to join landmark $20 billion Mozambique LNG financing

Christian Fernsby ▼ | July 21, 2020
The African Development Bank has concluded its bid to co-finance the construction of Mozambique's integrated Liquefied Natural Gas (LNG) plant by signing a senior loan of $400 million for the transformational project.
African Development Bank
Mozambique   African Development Bank
The Mozambique LNG Area 1 Project, estimated to cost over $20 billion, is ranked Africa's single largest foreign direct investment to date. It comprises 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 Mozambique's national oil and gas company, ENH.

Topics: African Development Bank Mozambique LNG

With the signing on 15 July, the Bank joins a global syndicate of commercial banks, development finance institutions and export credit agencies to provide the requisite financing for the project. Financial close is expected later in 2020.

The project, which benefits from one of the world's largest natural gas reserves off the coast of northern Mozambique, will be the country's first liquefied natural gas development. It will initially consist of two LNG trains with a total capacity of around 12 million tons per annum.

As well as being transformational for the energy sector in Mozambique, the project is expected to have broader socio-economic benefits for the country.

The project comprises both onshore and offshore components, which will be funded by a combination of equity, pre-completion cashflows and over $14 billion in senior debt facilities. The senior debt consists of a mix of Export Credit Agency (ECA) direct loans, commercial bank loans and the facility from the Bank, the only multilateral development institution involved in the project's first phase.

Overall, the project will improve livelihoods, spur economic growth and boost universal electricity access, in line with one of the Bank's High 5 strategic priorities, Light Up and Power Africa, Bank officials said.


 

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