AfDB set to decide on US$500 million investment in Area 1 this week

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AfDB set to decide on US$500 million investment in Area 1 this week

2:25 CAT | 18 Nov 2019

Pietro Toigo. [Photo: Adérito Caldeira/ A Verdade]

The African Development Bank (AfDB) may decide this week to invest about half a billion US dollars in the consortium exploiting natural gas in the Rovuma Basin’s Area 1 Dolphin/Tuna field.

“We are interested in participating in the financing of Area 1 and we are also interested in financing the optimisation of ENH’s participation,” AfDB representative in Mozambique, Pietro Toigo said.

Speaking to reporters at the multilateral financial institution’s second Africa Investment Forum in neighbouring South Africa, Toigo revealed that the ADB Board of Directors is considering investing in the consortium exploiting the Dolphin/Tuna field.

“Our participation will be below half a billion dollars – small, but we think it is strategic because we are a development partner, we are a partner [which is] participated in by the Government of Mozambique.”

In addition to direct funding to Area 1, the African Development Bank, the only AAA-rated financial institution in which the Mozambique government has capital, has an interest in “financing the optimisation of ENH’s share,” Toigo said, adding that the funding “will be considered by our Board of Directors next week”.

“Let’s see how we can participate to optimise Mozambican participation within the consortium over a longer timeframe. This is not a promise, but in principle the AfDB thinks that, for gas to be the transformer of the Mozambican economy, we must invest heavily in the links between [exploitation] projects and the Mozambican economy, and reinforce links with agriculture. Gas is an input for fertiliser production, with the industry, notably with electricity production, and balanced policies on local content, and that provides a real incentive for Mozambican companies to enter the gas value chain.”

By Adérito Caldeira

Source: A Verdade