Maputo — The African Development Bank (ADB) has announced approval of a loan of 400 million US dollars to the Mozambique LNG (Liquefied Natural Gas) Area One project.
This is the project, now led by the French company Total, which envisages setting up onshore LNG liquefaction plants with an initial production capacity of 12.88 million tonnes a year, drawing on the discoveries of massive reserves of natural gas in the Rovuma Basin, off the coast of the northern province of Cabo Delgado.
The other partners in the Area One consortium are Mitsui of Japan, PTT Exploration of Thailand, the Indian concerns Oil India, OVL and Bharat Petroleum, and Mozambique's own National Hydrocarbon Company (ENH).
The consortium members took the Final Investment Decision in June. A release from the ADB puts the eventual total investment in the project at 25.4 billion dollars. It adds that so far the project has signed eight long-term off-take contracts with companies such as Shell, Tokyo Gas, Centrica and EDF.
The ADB, says the release, is now joining "a global syndicate of commercial banks, development finance institutions and export credit agencies, to jointly provide 14 billion dollars in senior debt financing. Financial close is expected within the first half of 2020".
"Through its participation, the African Development Bank again demonstrates its leading role in supporting Africa's transformation", said ADP President Akinwumi Adesina. "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 of its nascent natural gas value chain, while creating growth opportunities and widespread industrialisation, while accelerating regional integration across southern Africa", Adesina added.