Mozambique: Maputo wants to restart natural gas project earlier than planned

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Mozambique: Maputo wants to restart natural gas project earlier than planned

1:19 CAT | 29 Sep 2021

Screen grab; AfDB

Mozambique’s finance minister said on Tuesday he hoped that TotalEnergies’works in Cabo Delgado would restart before the one-year deadline that the company estimated as necessary for the government to solve insecurity in the region.

“I think that the expected delay of the works will perhaps be reduced because we have indicated a year as the time needed to allow the project to restart, but looking at the situation today, I think that will not be the case, we are doing our best,” said the minister, showing optimism in reducing the deadline, estimated for next April.

Answering a question from the director of the African department of the International Monetary Fund (IMF) Abebe Aemro Selassie during the fourth Africa Resilience Forum, on the panel “The Security, Economic Growth, and Investment Nexus: Solutions for Mitigating Vulnerability and Fragility,” organised by the African Development Bank (AfDB), Maleiane was optimistic that work would restart before the one-year suspension deadline put forward by the authorities.

“The outlook is good because peace is holding, displaced people are returning to their homes, and we are now in the process of creating conditions for them to voluntarily come home and not simply wish to come home one day,” the minister added.

French oil company TotalEnergies, leader of the Area 1 project in northern Mozambique, suspended work on the facility near Palma on 24 March, the day insurgents attacked the town, and a month later announced the indefinite suspension of the entire project.

Valued at between €20 and €25 billion, TotalEnergies’ gas extraction megaproject is the largest ongoing private investment in Africa, backed by several international financial institutions and envisages the construction of industrial plants and a new town between Palma and the Afungi peninsula.

The first export of liquefied gas is scheduled for 2024, when Mozambique’s expenditure on servicing the public debt will see a significant increase, resulting from the postponement of interest rate rises until the year in which revenues are generated should increase via gas exports.

The armed conflict between military forces and insurgents in Cabo Delgado has caused over 3,100 deaths, according to the ACLED conflict registration project, and over 817,000 displaced people, according to Mozambican authorities.

Since July, an offensive by government troops with support from Rwanda, which was later joined by the Southern African Development Community (SADC), allowed for increased security, recovering several areas where there was rebel presence, including the town of Mocímboa da Praia, which had been occupied since August 2020.

Source: Lusa