State to inject US$500M in Mozambique Development Bank, PRECE says

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State to inject US$500M in Mozambique Development Bank, PRECE says

12:07 CAT | 09 Oct 2025

File photo: Lusa

The Mozambican government plans to inject US$500 million in initial funding for the future Development Bank, according to official documents seen by Lusa.

“To ensure its viability, the bank will initially be capitalised by the state, with US$500 million. Capital contributions will also come from development finance institutions, including the African Development Bank and the World Bank, as well as through the issuance of development bonds,” reads the Economic Recovery and Growth Plan (PRECE), recently approved by the government.

The document adds that “the bank’s operations will be governed by strict technical criteria to ensure the financial sustainability and the economic and social impact of the projects it finances” and that its priorities “will be initiatives with strong multiplier potential, capable of creating jobs, boosting domestic production and improving living conditions for the population.”

The plan states that the Development Bank of Mozambique aims to “attract and channel domestic and foreign resources to strategic projects” in sectors such as energy, industry, infrastructure, agriculture, health, education and housing, as well as to “promote the development” of small and medium-sized enterprises (SMEs) “through accessible credit and technical assistance, encouraging job creation and economic inclusion.”

It will also “promote investment in priority and sustainable sectors with a focus on financing areas that have a high impact on economic development, with social and environmental benefits,” while also helping to “reduce exchange rate risks by prioritising financing in local currency, thereby mitigating currency mismatch risks and making financing more accessible and stable for national beneficiaries.”

“The Development Bank of Mozambique will be a public financial institution with the main objective of catalysing the country’s sustainable and integrated development through the financing of structural projects that drive long-term economic growth,” the government also states, adding that it will focus “on strategic sectors such as industry and agriculture, tourism, energy infrastructure, transport, water and sanitation, and irrigation systems.”

“By offering credit with longer maturities and more affordable rates than commercial banks, it will make possible investments that are currently unfeasible for the private sector or the state itself due to limited resources,” it concludes.

The Mozambican government launched public consultations in September on the legal framework for the creation of the Development Bank of Mozambique.

In his inauguration speech as Mozambique’s fifth president on 15 January, Daniel Chapo announced the creation of the Development Bank of Mozambique as part of a broad package of measures to revitalise the economy and support the population.

“We will create the Development Bank of Mozambique to develop infrastructure, finance and strengthen strategic projects for the progress of our country. With resources generated from gas assets, we will capitalise this bank and immediately invest in projects that transform the lives of Mozambicans,” said the head of state at the time.

Source: Lusa