The African Development Bank (AfDB) as 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 transformation project.
The Mozambique LGN Area One 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 and Mozambique’s national oil and gas company, ENH.
AfDB joins a global syndicate of commercial banks, development finance institutions and export credit agencies to provide the requisite financing for the project.
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.
”Signing the Mozambique LNG Area One agreement heralds a new age of industrialization for Mozambique,” said Abdu Mukhtar, the director of the bank’s Industrial and Trade Development Department.
He noted that gas purchasers, such as fertilizer plants, had the potential for improving regional and global competitiveness.
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 Exports Credit Agency direct loans, commercial bank loans and the facility from AfDB, the only multilateral development institution involved in the project’s first phase.
The Nation_July 23, 2020_APO