Mozambique may take on commercial loans up to a maximum of US$900 million

13 July 2012

The Mozambican government may take on commercial loans of a maximum US$900 million until 2016 to fund construction and/or development projects for airport facilities and energy resources, Mozambican newspaper Correio da Manhã reported.

Citing an agreement signed between the government of Mozambique and the International Monetary Fund (IMF), the newspaper said that part of this funding had already been used when the government took on two loans worth a total US$146 million, and that a third loan was being considered to be used to increase the cargo processing capacity of the port of Beira and construction of the Centre-South power transmission line.

Under the terms of the agreement signed by the IMF and the Mozambican government for a three-year period, the IMF noted that the Mozambican authorities’ access to commercial loans should be increased, but remain in line with the country’s macroeconomic stability and the sustainability of public debt.

The IMF also said that financing of other large infrastructure projects was under consideration and, given its large size, the level of commercial debt of the Mozambican state may increase quickly to close to the maximum the programme allows, of US$900 million.

In the agreement the Mozambican government re-stated its commitment to modernise its debt management and procedures for selection of projects that will receive funding. It added that with the support of the IMF and the World Bank a medium-term debt strategy was being drawn up along with the second evaluation of debt sustainability for approval by the Council of Ministers in the first half of 2012. (macauhub)