Mozambique: Investments in energy sector by-pass financial crisis

5 March 2009

Maputo, Mozambique, 5 March – The Mozambican energy Minister, Salvador Namburete, said Wednesday in Maputo that he was unaware of any potential investor backing down from any of the large and small-scale projects planned for the energy sector as a result of the current world financial crisis.

Speaking at a press conference on the hosting of a seminar about biofuels in Africa, which will be held in Maputo on Thursday and Friday, the minister said that the energy sector projects continued to be carried out “within the established schedules,” giving the example of the Government continuing to work with the proposing companies for the construction of the Mpanda Nkwa dam.

“Today (Wednesday) they said that the first US$50 million had already been paid out. The truth is that it is a refinery project whose total value is US$8 billion, but if their is a financier that frees up, at this point, US$50 million to fund some stages of the project it is a sign that it is not being abandoned,” the minister said.

The IMF recently forecast that the Mozambican economy would see a slowdown in its growth – of 5.5 percent this year and 5.4 percent in 2010, as a result of the “impact of” the world financial crisis.

According to the IMF, the world financial crisis, “will result in a reduction of investments,” and “increase uncertainty about the provision of official aid to development.”

In its most recent report about economic activity in Mozambique, Portuguese bank BPI said that, funding for so-called “mega-projects” in Mozambique, is now the “biggest risk to the growth of the Mozambican economy.”

Amongst the projects affected, according to BPI’s regular report on economic activities in Mozambique, published Wednesday night, are M’panda Nkua, which was due to be launched at the beginning of 2009, and the extension of the power grid by 1,400 kilometres, as well as expansion of the production capacity of the Cahora Bassa Hydroelectric Dam (HCB), which implies an investment of US$1 billion.

The construction of another metal works in Maputo, valued at US$2 billion, is also under threat, as are “several mining projects led by smaller-sized companies, due to their more vulnerable position.” (macauhub)