The African Export-Import Bank (Afreximbank) is aiding the financing of Mozambique’s Area 1 Liquefied Natural Gas (LNG) project through guarantees and direct lending of up to $400 million.

The $24 billion landmark project upon completion, will be the largest private foreign direct investments in Africa, the largest LNG project in Africa and one of the largest LNG projects in the world. The project is to enable the extraction of natural gas offshore, transfer of the product to the onshore processing facilities and its conversion to LNG before export to various markets around the world.

One of the focus of the project is to operate in an environmentally and socially sustainable manner to protect the environment, the public, its employees and contractors. It is aimed to open up for more foreign investment in the country, to create jobs, massively improve the standard of living of Mozambican residents and drive long-term sustainable economic growth for Mozambique.

Africa’s foremost multilateral trade finance institution, Afrexim, is not the only bank or firm that has invested in the project as several financiers have committed to the cause of this project. The Bank’s commitment to the project aligns with its strategy of promoting intra-African trade, industrialisation and export development.

The financing is being done with Export Credit Insurance Corporation of South Africa SOC Limited (ECIC). The joint collaboration is being done under the South Africa-Africa Trade and Investment Promotion Programme (SATIPP) that was launched in 2018 for the promotion and expansion of trade and investments between South Africa and other countries on the continent.

According to the Bank’s strategy of using joint partnerships to promote trade and investment in Africa, it is again deploying its ECA-Plus Guarantee, under the Afreximbank Guarantee Programme (AFGAP) to support this project. The Programme enhances collaboration between the Bank and global export credit agencies where the Bank uses its guarantees to share risk with ECAs in transactions pertaining to Africa by co-guaranteeing and re-guaranteeing, which is intended to help create capacity, reduce risk and unlock capital for trade and investments in Africa.

Speaking on the Bank’s commitment, President of Afreximbank, Professor Benedict Oramah said “We are confident the Mozambique LNG project will create opportunities for the people of the country and drive sustainable economic growth. We believe that the success of projects such as this will create a precedent through which other development projects in Africa can secure funding and gain international traction. We are delighted to be one of the key stakeholders involved in this project which will accelerate the rate of growth of intra-African trade.”