Mozambique’s national oil and gas company, ENH; is expected to secure the funds needed for its 15% stake in the Rovuma basin Area 1 natural gas project in northern Mozambique, according to the latest report on the country by the Economist Intelligence Unit (EIU).
The document’s authors wrote that the project is sound in financial terms, has the backing of established international oil groups, is transparent and has been approved by the Mozambican parliament, “so ENH should have no difficulty raising the necessary funds.”
The document recalls that the state-owned company has already postponed its recourse to the market on two occasions, arguing that it wants better conditions, and its chairman, Omar Mithá, recently announced a new postponement, this time until December or even January, given the forthcoming holiday period.
The EIU mentioned the issue of hidden debts and recalled that Prime Minister Carlos Agostinho do Rosário stated that the Government would pay only a portion, and the payment of the remaining portion would be the responsibility of the public companies that took on those debts, such as ProIndicus and Mozambique Asset Management (MAM).
“The portion to be paid by the Government is yet to be defined,” the report said, and mentioned the intense domestic political debate over whether Mozambique could be required to pay debts that have been endorsed by the state if they have been illegally approved.
The document also noted the two cyclones that struck Mozambique this year to note that following damage to infrastructure, buildings, ports and agricultural fields, the country’s economy is expected to grow at a rate of 1.0% this year, which will be mainly due to reconstruction efforts.
From 2020 onward the Mozambican economy is expected to see some improved growth to an average of 7.16% per year over the period from 2020 to 2024, and in the last year of the interval it should be growing at a rate of 9.9% driven by the start of exploration of natural gas deposits in the Rovuma basin, which is expected to happen as early as 2023 in the Coral field.(Macauhub)