Mozambique plans to start exporting liquefied natural gas (LNG) by 2024 ahead of Tanzania, after Total SA secured a $14.9 billion debt facility for the construction of an LNG processing plant in Cabo Delgado Province, in the deep waters of Ruvuma Basin north of the country.
The debt financing agreement, which is the country's first onshore development, was signed on July 15, 2020.
Tanzania's LNG project -- in the natural gas-rich offshore Ruvuma Basin -- in the southeastern part of the country -- still awaits the final investment decision (FID) after the government grants project approval.
Mozambique's FID for the $20 billion LNG project was made in June 2019 and building works started in August the same year.
Total SA's chief financial officer Jean-Pierre Sbraire said Mozambique's senior debt facility -- the biggest in Africa to date -- includes funds from eight Export Credit Agencies (ECAs), 19 commercial banks and a $400 million senior loan from the African Development Bank Group (AfDB).
"This is a first in class transaction that sets a new standard for mega-projects on the African continent," said AfDB's acting General Counsel Souley Amadou on the collaboration of project sponsors, Mozambique's government, the financing parties and advisors.
Total SA is leading a consortium of firms in the project that will have a gas plant and an export terminal on the Afungi peninsula.
Total acquired a 26.5 per cent stake in the Mozambique LNG project from Occidental Petroleum for $3.9 billion in September 2019 .
"The project will facilitate the development of gas-fired electricity and will play a key role in providing reliable affordable energy for the country and the wider region," said Wale Shonibare, AfDB's director for Energy Financial Solutions, Policy and Regulation.