PARIS – French oil major Total has signed a $14.9 billion senior debt financing agreement for its massive liquefied natural gas (LNG) project in Mozambique, the biggest project financing ever in Africa, it said on Friday.
The project includes the development of the Golfinho and Atum natural gas fields in the Offshore Area 1 concession, and the construction of a two-train liquefaction plant with a capacity of 13.1 million tons per annum, Total said.
Jean-Pierre Sbraire, chief financial officer of Total, said the signing, which secures the majority of the project’s total investment of $20 billion, shows financial institutions have confidence in the long-term future of LNG in Mozambique.
Mozambique LNG is one of several projects being developed in the country’s northernmost province of Cabo Delgado after one of the biggest gas finds in a decade off its coast. Together, the projects are worth some $60 billion.
Rival Exxon Mobil delayed the final investment decision on its nearby Rovuma LNG gas project due to the coronavirus pandemic, and Mozambique expects the decision next year.
Mozambique LNG’s project financing includes direct and covered loans from eight export credit agencies (ECAs), 19 commercial bank facilities, and a loan from the African Development Bank, Total said in a statement.
UK Export Finance (UKEF) was among the ECAs contributing to the financing, alongside the Export Import Bank of the United States, Italy’s SACE, the Netherlands’ Atradius, the Export Credit Insurance Corporation of South Africa, Japan Bank for International Cooperation, Nippon Export and Investment Insurance, and the Export-Import Bank of Thailand.
Reuters reported last month that UKEF was planning to commit around $800 million of funding – a contribution that drew criticism from environmental campaigners who say Britain should not be funding fossil fuel projects.
Sealing the Total project financing is a win for Mozambique’s government as it tackles security challenges.
Cabo Delgado has seen an Islamist insurgency with links to Islamic State gather pace over the past year, and suspected Islamist insurgents attacked a town 60 km (37 miles) south of the gas projects late last month.
Reporting by Dominique Vidalon and Helen Reid; Editing by Chris Reese and Mark Potter