Terminal de LNG
Maputo, 21 Mar (AIM) – The Fitch Ratings Agency, based in both New York and London, believes that if the loan of almost five billion dollars from the United States Export-Import Bank is approved for the liquefied natural gas (LNG) project in Mozambique, “this will improve prospects for the resumption of the huge project, which could have multiple positive benefits for the country over the medium term.”
The LNG project is budgeted at around 20 billion dollars. The Export-Import Bank had previously agreed a 4.7 billion dollar loan under President Donald Trump’s first administration, but it needed to be re-approved after construction on the project was frozen in 2021 following a major attack by Islamist terrorists against Palma town, in the northern province of Cabo Delgado.
According to a report, the work on the TotalEnergies LNG project may resume later this year, once the force majeure that has been in place since 2021 is lifted.
“Successful development of the project would boost economic growth and provide important support to Mozambique’s export earnings and fiscal revenues. The first principal repayments of around 250 million dollars a year on Mozambique’s 900 million dollars Eurobond are due from 2028, ahead of its maturity in 2031, a period that may overlap with the start of production”, reads the note.
(The Eurobonds are the renamed bonds first issued by the fraudulent company Ematum, set up by the security sevice, SISE, in 2013. Although the country’s highest legal body, the Constitutional Council, ruled the bonds illegal and unconstitutional, the government has continued to pay the bondholders)
Fitch also believes that the resumption of construction on TotalEnergies’ LNG project could facilitate a final investment decision on a proposed USD30 billion project by ExxonMobil “and this project would be partly onshore and would contribute to economic growth during its construction stage. The production capacity of this project could be the largest so far in Mozambique, with a total capacity of 18 million tonnes per annum (mtpa), compared with 12.9 mtpa for the TotalEnergies project. Production is expected to start after 2030.”
However, the document says, security threats and political instability could still pose risks to resumption of the TotalEnergies LNG project.
“Notably, our assumption that a Rwandan force, in place since 2021, will continue to support security in the area around the development is subject to uncertainty. EU funding for the force’s presence could be affected by political controversies. For example, the EU imposed restrictions on some members of the Rwanda Defence Force in March 2025 over alleged involvement in armed conflict in the Democratic Republic of the Congo. Further domestic political and social unrest in Mozambique could also retard progress on the project”, reads the document.
“Development of the LNG sector will be important to Mozambique’s medium-term credit profile. However, we believe more important drivers of the sovereign rating in the near term will be the government’s access to external financing, its efforts to consolidate the public finances, and the prospects for an easing of domestic political and social tensions that support a normalization of economic activity”, the Fitch report added.
(AIM)
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