The board of directors of the African Development Bank Group (AfDB) on Thursday approved a long-term senior loan of $400M to support building an integrated liquefied natural gas (LNG) plant, including a liquefaction facility in Mozambique
Mozambique LNG Area 1 Project is currently Africa’s single largest foreign direct investment and has attracted plenty of interest.
A global team of energy developers and operators have vied for a piece of the project. In September, French operator Total acquired Anadarko’s 26.5% stake to become the largest stakeholder, followed by Mitsui, Mozambique’s national oil and gas company ENH, ONGC Videsh Limited, Bharat Petroleum, Oil India and PTTEP.
AfDB joins a global group of fianciers to jointly provide the debt financing for the project. The site will eventually have eight production units. Financial close is expected within H1 2020.
AfDB president Akinwumi Adesina said the funding is “strategically aimed to help transform Mozambique from ‘developing’ to ‘developed’ nation,” adding “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 LNG liquefaction plant will have a production capacity of 12.88 mta.
Mozambique gears up for investment
Mozambique is expected to become one of the world’s largest LNG exporters.
AfDB’s investment comes a month after the Export-Import bank of the United States (EXIM) backed the project with a direct loan of up to US$5Bn.
An adjacent project, Area 4, developed by ExxonMobil is expected to receive US$500M in initial investments. Area 4, a US$30Bn project jointly operated with Eni SpA of Italy, has a capacity of 15 mta per year.
Area 1, Area 4 and Eni’s US$8Bn 3.4-mta floating plant will give Mozambique the ability to export 31 mta, about 10% of today’s global market.