Mozambique Area 1 LNG project : Afreximbank commits $400m funding

The Mozambique Area 1 LNG project, which is being planned to be developed by Total and its partners with an investment of $20 billion-$24 billion, has secured a financing commitment of $400 million from the African Export-Import Bank (Afreximbank).

The amount from the multilateral trade finance institution will be in the form of guarantees and direct lending to the integrated LNG project, which as per Afreximbank will play a crucial role in the economic growth of Mozambique besides supporting the wider region.

The bank’s funding will be used partly towards the development activities of the Mozambique Area 1 LNG project that are needed for drawing natural gas from the Golfinho and Atum natural gas fields in Offshore Area 1 concession, its transport to onshore processing facilities, and the subsequent conversion to LNG for exporting to international markers.

The Mozambique LNG project will initially operate with a couple of LNG liquefaction trains, each having a processing capacity of 6.44 million metric tonnes a year. The initial development is anticipated to yield over 16 trillion cubic feet of gas and 93 million barrels of condensate over its 30-year development and production period.

Afreximbank commits $400m funding for the Mozambique Area 1 LNG project. Photo courtesy of African Export-Import Bank.

Afreximbank said that its funding for the Mozambique Area 1 LNG project aligns with its strategy of encouraging intra-African trade and also industrialization and export development. The bank said that its guarantee is being jointly done with Export Credit Insurance Corporation of South Africa SOC.

Benedict Oramah – President of Afreximbank, commenting on the Mozambique Area 1 LNG project funding, said: “We are confident the Mozambique LNG project will create opportunities for the people of the country and drive sustainable economic growth. We believe that the success of projects such as this will create a precedent through which other development projects in Africa can secure funding and gain international traction.

“We are delighted to be one of the key stakeholders involved in this project which will accelerate the rate of growth of intra-African trade.”

Last month, Total secured financing for the Mozambique LNG project with the signing of a $14.9 billion senior debt financing, which is to come through direct and covered loans from eight export credit agencies (ECAs), 19 commercial bank facilities, in addition to a loan from the African Development Bank.