More African financial institutions have joined in the scramble to fund Mozambique’s US$20-billion liquefied natural gas (LNG) project being developed by a consortium led by French oil merger Total, APA learnt here on Tuesday.The African Development Bank (AfDB) and the Development Bank of Southern Africa (DBSA) separately confirmed on Tuesday that they have joined a global syndicate of financial institutions that have agreed to support the Mozambique LNG Area 1 Project.
The continental bank said it “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.”
“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,” AfDB said in a statement.
Financial closure for the deal is expected later in 2020, the bank said.
South Africa’s state-owned DBSA also confirmed on Tuesday that it would provide U$120 million for the project which is located in northern Mozambique.
DBSA said its portion of the funding would be used towards upstream and downstream project development activities required to extract natural gas offshore and bring it onshore for processing before conversion to LNG for export to various markets.
The onshore Mozambique LNG terminal will process gas mined from the Golfinho and Atum fields located within the offshore Area 1 resource in the Rovuma basin.
“The project will unlock significant opportunities across the continent to export gas as an alternative energy resource,” DBSA official Mohan Vivekanandan said in a statement.
The project is ranked Africa’s single largest foreign direct investment to date and 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.
Total announced last week that it had signed a US$14.9-billion debt financing agreement for Mozambique LNG, revealing that the financing had been secured from eight export credit agencies, 19 commercial banks and development finance institutions.
On completion, the project is expected to have a total capacity of around 13 million tonnes of LNG per year.