The consultancy Capital Economics said on Friday that the delay in gas projects in Mozambique will make it "complicated" to pay interest on the sovereign debt from 2023 onwardsincreasing the risk of a new Financial Default.

"A postponement of liquefied natural gas exports could unexpectedly lower government revenues, which official estimates put at nearly $100 billion over the 25-year life of the project, and whose prospects have been critical to propping up the country's weak public finances, whose debt-to-GDP stands at 122%," reads a country analysis.

In the analysis, sent to clients and to which Lusa had access, the Capital Economics consultants write that, with the delay, "servicing the external debt would be complicated", since, "for example, sovereign bond coupons will increase from 5% to 9% in 2023, in line with the original timetable on the start of gas exports, and fears of a new default would likely increase.

At issue is the restructuring of debt securities that Mozambique made following the so-called `black debt scandal', which reduced the interest payable until 2023, but almost doubled the installments from that year on, which was the time when natural gas exports were expected to begin, whose tax revenues would support the increased costs.

Capital Economics considers that, despite the difficulties, "the Government would be able to support this situation provided that all major gas projects eventually go ahead, albeit with delays," namely those led by Eni and Total, which are expected to continue, if only "because of the large financial penalties that would make their exit unlikely."

The problem, they point out, is that "if ExxonMobil does not give the green light to the development of its project due to safety or other reasons, investor concerns will increase and then it would be much more difficult to bring down the debt-to-GDP ratio, which would make the National Hydrocarbons Company [ENH], the public entity involved in the gas projects, very difficult to pay its obligations."

The oil company Total has suspended operations in the north of the country, near Palma, due to the terrorist attacks that have plagued the region in recent years.

Armed groups have terrorized Cabo Delgado since 2017, with some attacks claimed by the `jihadist` group Islamic State, in a wave of violence that has led to more than 2,500 deaths according to the ACLED conflict registration project and 714,000 displaced according to the Mozambican government.

An attack on Palma, near the gas project under construction, on March 24 caused dozens of deaths and injuries, with no official balance announced.