Here are the six priority projects to be financed by Mozambique’s Sovereign Fund

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Here are the six priority projects to be financed by Mozambique’s Sovereign Fund

7:54 CAT | 22 Oct 2025

FILF- For illustration purposes only. [File photo: Notícias]

The Mozambican government has announced plans to allocate 2.934 billion meticais (around US$46 million at current exchange rates) from the Sovereign Wealth Fund of Mozambique to finance six priority infrastructure projects scheduled for implementation in 2026. These include the construction of a bridge, a hospital, schools and a dam, as outlined in the supporting documents for the 2026 Economic and Social Plan and State Budget (PESOE). The decision aligns with the priorities set out in the government’s 2025–2029 Five-Year Programme.

The Sovereign Fund of Mozambique, established in April 2024 and funded by revenues from liquefied natural gas (LNG), is set to finance the construction of a bridge over the Save River in Massangena with 1 billion meticais (around US$15.6 million).

Additional allocations include 365.2 million meticais (US$5.7 million) for urbanisation and land infrastructure projects, 500 million meticais (US$7.8 million) for the construction and equipping of Chibuto District Hospital, 143.4 million meticais (US$2.24 million) for the establishment of customs and toll posts, and 800 million meticais (US$12.5 million) for the construction and equipping of primary schools.

Furthermore, 134.8 million meticais (US$2.1 million) will be allocated to continue the construction of the Locomue dam.

The Sovereign Wealth Fund was created as a strategic tool for macroeconomic and fiscal stabilisation, aiming to manage LNG revenues prudently and sustainably. Its objectives include mitigating the effects of international LNG price volatility on public finances, ensuring budgetary predictability, promoting macroeconomic stability, accumulating long-term savings, and fostering economic diversification to enhance the country’s resilience to internal and external shocks.

However, the Civic Movement on the Sovereign Wealth Fund raised concerns regarding the legality of using the fund to finance social projects, as suggested in the 2025 State Budget approved earlier this year. The movement argues that such allocations violate the FSM law, which mandates that the government justify any deviation from the 40% allocation to the fund. They contend that the government has not provided adequate justification for using FSM resources for social and economic projects, marking a departure from previous practices.

In 2025, the Sovereign Wealth Fund is financing 15 projects, including maintaining a 95% vaccination coverage for children under one year, allocating production means to 468,169 households, and expanding and rehabilitating water supply infrastructure, with respective allocations of 416.4 million meticais (US$6.7 million), 201.3 million meticais (US$3.2 million) and 679 million meticais (US$10.9 million).

Source: Lusa