The approval of a 4.7 billion dollar loan for TotalEnergies' liquefied natural gas (LNG) venture in Mozambique, if confirmed, will improve the prospects for the resumption of the huge project, which could have multiple positive benefits for Mozambique in the medium term, says Fitch Ratings.

According to a publication by the financial rating agency Fitch Ratings, to which the MZNews had access to, the issue of terrorism in Cabo Delgado continues to pose a major risk to the resumption of the LNG project.

"We believe insecurity will continue to pose significant risks to the completion of the development," says Fitch.

According to the same publication, Energy Minister Estevão Pale revealed a few days ago that Exim Bank's board of directors voted to approve the project, according to media reports, although the bank has yet to confirm this. "If true, this would confirm the view we expressed when we upgraded Mozambique's rating to 'CCC' from 'CCC+' in February 2025, that Exim Bank's financing prospects could improve under the new US administration," reads the agency's website.

"Our basic assumption remains that work on the TotalEnergies LNG project will resume in 2025, as soon as the force majeure that has been in place since 2021," he adds, recalling that TotalEnergies said in January that the project would not be operational until 2029, "but we believe that a rapid resumption of the project could allow part of the production and export to begin around 2030."

For Fitch, the successful development of the project could boost economic growth and provide important support for Mozambique's export and tax revenues.

In addition, the resumption of construction of TotalEnergies' LNG project could facilitate a Final Investment Decision for ExxonMobil's LNG project valued at 30 billion dollars. "This project would be partially onshore and would contribute to economic growth during its construction phase. The production capacity of this project could be the largest to date in Mozambique, with a total capacity of 18 million tons per year (mtpa), compared to 12.9 mtpa for the TotalEnergies project," he concluded.

(Photo DR)