LNG Storage Tanks/Bloomberg
The liquefied-natural-gas (LNG) projects the three companies plan to build in Cabo Delgado province will be transformational for the world’s sixth-poorest nation, which is still recovering from a civil war that ended in 1992.
Sunday 19, May 2019
(Bloomberg) --Mozambique’s government expects to reap $95 billion of revenue over 25 years from natural-gas deposits being developed in the country -- more than seven times larger than its gross domestic product (GDP).
Exxon Mobil’s Rovuma LNG project, for which the cabinet approved the development plan this week, is expected to generate $46 billion of income for the state. That adds to the $49 billion of revenue anticipated from two other LNG projects being developed nearby by Eni and Anadarko Petroleum, it said in June.
According to the World Bank, Mozambique’s GDP was less than $13 billion in 2017.
Mozambique’s economy has also struggled since the government defaulted on $2 billion of debt in 2017, the bulk of which the authorities hid from donors and the International Monetary Fund (IMF).
The government is in restructuring talks with holders of its $727 million euro bonds and has reached an early agreement to pay them five per cent of its revenue from the Eni and Anadarko projects, up to a maximum $500 million.
Mozambique also reached a similar preliminary deal with Russia’s VTB Capital for another of the loans that made up the $2 billion.