first_imgRead more: Total signs debt financing agreement for Mozambique LNG The bank’s acting general counsel, Souley Amadou, noted: “This is a first in class transaction that sets a new standard for mega-projects on the African continent. The collaboration and unity of purpose between the sponsors, government of Mozambique, the financing parties and advisors were truly remarkable.” The Mozambique LNG Area 1 Project, estimated to cost over $20 billion, is ranked Africa’s single largest foreign direct investment to date. The AfDB joins a global syndicate of commercial banks, development finance institutions and export credit agencies to provide the requisite financing for the project. Overall, the project will improve livelihoods, spur economic growth and boost universal electricity access, in line with one of the Bank’s High 5 strategic priorities, Light Up and Power Africa, AfDB officials said. The senior debt consists of a mix of Export Credit Agency (ECA) direct loans, commercial bank loans and the facility from the Bank, the only multilateral development institution involved in the project’s first phase. The bank’s involvement is consistent with its country strategy in Mozambique, which aims to leverage natural resource development and investment in sustainable infrastructure. The project, which benefits from one of the world’s largest natural gas reserves off the coast of northern Mozambique, will be the country’s first liquefied natural gas development. It will initially consist of two LNG trains with a total capacity of around 13 million tons per annum. Wale Shonibare, the Bank’s Director for Energy Financial Solutions, Policy and Regulation, said the project would create a new energy model in Mozambique and help “to electrify Southern Africa.” Financial close is expected later in 2020. Finance and Policy The bank played a crucial role in requiring compliance with strict environmental and social standards, in addition to working on SME and gender-development in Mozambique and promoting adherence to international best practices. The project comprises both onshore and offshore components, which will be funded by a combination of equity, pre-completion cashflows and over $14 billion in senior debt facilities. TAGSAFDBgasLNGMozambique Previous articleSierra Leone: $6m aids Bumbuna Hydro II project to begin next phaseNext articleFirst undergrid mini-grid deployment in Nigeria a success Babalwa BunganeBabalwa Bungane is the content producer for ESI Africa – Clarion Events Africa. Babalwa has been writing for the publication for over five years. She also contributes to sister publications; Smart Energy International and Power Engineering International. Babalwa is a social media enthusiast. Sign up for the ESI Africa newsletter Generationcenter_img AFD and Eskom commit to a competitive electricity sector It 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. “Signing the Mozambique LNG Area 1 agreement heralds a new age of industrialization for Mozambique,” said Abdu Mukhtar, the Director of AfDB’s Industrial & Trade Development Department. Featured image: Stock “Through the availability of domestic gas, the project stands to facilitate the development of gas-fired electricity in Mozambique. This will play a key role in providing reliable and affordable energy for the country and the wider region,” said Shonibare. RELATED ARTICLESMORE FROM AUTHOR New energy model in Mozambique As well as being transformational for the energy sector in Mozambique, the project is expected to have broader socio-economic benefits for the country. Low carbon, solar future could increase jobs in the future – SAPVIA BRICS He noted that gas purchasers, such as fertilizer plants, had the potential for improving regional and global competitiveness. Webinar recording: Heightened interest in LNG stimulates Africa’s gas economy The African Development Bank (AfDB) has concluded its bid to co-finance the construction of Mozambique LNG Area 1 Project by signing a senior loan of $400 million for the project. UNDP China, CCIEE launch report to facilitate low-carbon developmentlast_img