The Mozambican government made a bad deal by financing the participation of the state-owned Empresa Nacional de Hidrocarbonetos (ENH) in the Rovuma natural gas exploration contracts with investment from the United Arab Emirates (UAE).

The conclusion comes from the Center for Public Integrity (CIP), which talks about annual losses of withholding taxes estimated at between 100 and 276 million dollars. However, ENH says that the idea was not to delay the projects planned for the Rovuma basin.

In 2022, the Ministry of Economy and Finance (MEF) announced a significant reduction in the debt of the national oil and gas company, Empresa Nacional de Hidrocarbonetos (ENH), from 2.98 billion dollars to 18 million dollars.

This sharp decline was mainly attributable to the isolation of ENH's project financing through Special Purpose Vehicles (SPVs) located in the United Arab Emirates (UAE).

Cited by VOA, researcher Rui Mate says that this report "raises doubts about the transparency of the costs of financing exploration projects through companies located in tax havens."

The transfer of ENH's Coral South project loans to an SPV is expected to result in withholding tax losses of between 100.7 and 276.6 million dollars, which is why Rui Mate considers this "a bad deal due to tax collection losses!

Ismael Sulemane Júnior, from EHN, says that the use of Special Purpose Companies as an option in the financing contracts for natural gas exploration was due to "the need not to delay the projects planned for the Rovuma basin".

For the director of CIP, Édson Cortês, the use of special purpose companies in tax havens "has the effect of weakening the contribution of operating companies to the country's development".