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AfDB approves US$400mn loan to support Mozambique LNG project

AfDb said Mozambique’s gas represents an important source of supply diversification. (Image source: U.S. Department of Agriculture/ Flickr)

The African Development Bank Group (AfDB) has approved a long-term senior loan of US$400mn to support the construction of an integrated LNG plant, including a liquefaction facility in Mozambique

AfDB stated in a statement that the Mozambique LNG Area 1 project, ranked Africa’s single largest foreign direct investment to date, 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.

Akinwumi Adesina, Bank Group President, said, “Through its participation, the AfDB again demonstrates its leading role in supporting Africa’s transformation. 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,” Adesina added.

Through this approval, the Bank carries a mandate to ensure the project’s adherence to international transparency standards and full compliance with environmental and social requirements, in line with its Integrated Safeguards System.

The LNG liquefaction plant will have a production capacity of 12.88 MTPA. The project is the first of several LNG trains expected to undergo development in the northern part of the country.

The project has already signed eight long-term off-take contracts with some of the prominent LNG players, including Bharat, Centrica, China offshore state-owned oil & gas producer CNOOC, Taiwan’s CPC Corporation, Electricite de France EDF, JERA, Pertamina, Shell, Tohoku Electric, and Tokyo Gas.