Mozambique: Sovereign Fund finances first 15 projects this year

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Mozambique: Sovereign Fund finances first 15 projects this year

2:17 CAT | 09 May 2025

File photo: Lusa

Mozambique expects €69.2 million in revenue from the exploration of liquefied natural gas (LNG) this year, 40% of which will go to the Sovereign Fund, which will finance its first 15 projects in 2025, including the building of 12 new secondary schools.

According to data from the proposed law on the Economic and Social Plan and State Budget (PESOE) for 2025, which began to be debated in the Assembly of the Republic today, just over 5,016 million meticais (€69.2 million) are expected in revenue from the Coral Sul LNG project in the Rovuma basin, Cabo Delgado.

Of this total, the budget proposal states that 3,009 million meticais (€41.5 million) – equivalent to 60% of this amount – will be used to finance the State Budget, and the remaining 40% will be invested in the Mozambique Sovereign Fund (FSM), which began operating exactly one year ago.

“All of the received amounts up to this amount will go to the State Budget, amounts above this limit will be transferred to the FSM,” the document states.

According to the legislation, the resources that finance the budget “must be invested in strategic domestic investments, especially in priority areas such as infrastructure, agriculture, renewable energy and industry”, to “ensure that revenues from the exploitation of natural resources promote the sustainable and inclusive economic development of the country”.

In the first quarter, all revenue from LNG exploration will be allocated to the Treasury’s Single Account, until it reaches 60% of the total projected revenue, known as the Budget Quota, with the remaining portion going to the Sovereign Fund account.

The document also specifies projects to be financed this year by the Sovereign Fund, such as the construction of two cold storage warehouses for the preservation of products in the Industrial Parks of Beluluane and Topuito, estimated at 45.5 million meticais (€627.5 thousand), and the contribution, with 27.5 million meticais (€380,000) to the completion of the construction of two feed factories in Nampula and Niassa provinces.

The production, distribution and planting of 6,674,660 cashew tree seedlings is also planned, at a cost of 90 million meticais (€1.2 million), as well as maintaining “95% or more coverage of fully vaccinated children under one year old”, at 416.4 million meticais (€5.7 million).

Among the 15 projects to be financed by the Sovereign Fund in 2025 are also the allocation of means of production to 468,169 households (201.3 million meticais/€2.8 million euros), and the expansion and rehabilitation of water supply infrastructures (679 million meticais/€9.4 million).

The acquisition and distribution of 15,080,550 school books for all primary schools is also planned, at a cost of 779.5 million meticais (€10.8 million),as is the construction of 12 secondary schools “according to the quality and resilience standard” (311.6 million meticais/€4.3 million) and of 214 primary school classrooms (225.8 million meticais/€3.1 million).

The Sovereign Fund will also purchase and distribute 6,000 school desks, equip five technical and vocational education institutes ( 287.8 million meticais/€4 million), build ten dams for a sum of 102.1 million meticais (€1.4 million), and distribute 150 kits to stimulate entrepreneurship and the development of small and medium-sized companies (SMEs) in the industrial, agricultural, services and mining sectors, for 137.3 million meticais (€1.9 million).

Lusa reported in February that the Mozambican state collected a total of 158.8 million dollars (€140 million) in 2024 in revenues from oil and natural gas exploration that were channelled to the new fund.

On December 15, 2023, the Mozambican parliament approved the creation of the FSM with revenues from natural gas exploration, which in the 2040s are expected to reach US$6 billion (€5.29 billion) per year.

Source: Lusa