An agreement which proves that crisis is not stopping investment in Mozambique

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An agreement which proves that crisis is not stopping investment in Mozambique

10:47 CAT | 12 Jun 2017

Global Construction Review

An analyst at Wood Mackenzie consultancy who follows the Mozambican economy said on Friday that the signing of the investment agreement of ENI shows that the government is capable of sanctioning large projects and that the debt crisis has not stopped investments in the country.

“The fact that the Coral South project is moving forward even in the current environment is testament to the trust in Mozambique projects and the fact that companies and financial institutions are willing to invest in these projects,” Mohammed Mansur said.

In an interview with Lusa in London, Mohammed said that the agreement between ENI and the Mozambican state also shows that the debt crisis was not an absolute brake on the development of gas exploration mega-projects, which could themselves accelerate decisions by other companies.

Asked if the signature could facilitate new agreements by other companies, Mohammed replied: “The signature shows that the government has the capacity to sanction a project of this size and intensity. Certainly, companies will look at ENI’s example, but they need to work in the context of their own specific projects, with all the right details and guaranteed funding.”

Overall, ENI’s final investment decision is “positive news and a big step for the liquefied natural gas industry because it is the first project of its kind to go forward in sub-Saharan Africa and places Mozambique within the world oil and gas sector ranks”, Mohammed said

This, he continued, “changes the view of Mozambique’s evolution in a positive way” and proves that debt crises do not stop long-term investments in countries.

“The debt crisis has been taken into account, but the companies have a long-term position in these projects and so it is the long-term perspective that determines whether or not the projects go forward,” Mohammed added, concluding that a country could be unstable in the short term, but over 30 years the risk was less acute.

Source: Lusa