Mozambique and EU sign financing agreements totalling 217 million euros

Mozambique and EU sign financing agreements totalling 217 million euros

The Mozambican government on Thursday signed financing agreements with the European Union covering trade, biodiversity, agribusiness and transport. Valued at 217 million euros, the agreements are part of the European Union supported PROMOVE programme which focusses on four key areas: trade facilitation, sustainable natural resources management, sustainable agriculture and agribusiness, and road rehabilitation in rural areas.

The programme operates in the northern province of Nampula and the central province of Zambezia with an overall objective of supporting rural development through fostering sustainable, inclusive and broad-based economic growth and sustainably reducing poverty.

The signing of the agreement is the highlight of the visit to Mozambique by the European Commission’s Director-General for International Cooperation and Development, Stefano Manservisi.

After the signing ceremony, Manservisi stressed that “the European Union has always worked in close partnership with Mozambique and we reiterate our commitment to boosting this cooperation for more inclusive and sustainable growth”.

Mozambique’s Foreign Minister Jose Pacheco welcomed the agreement, pointing out that “the agreements signed today are a clear testimony of the excellent friendship and cooperation between the Republic of Mozambique and the European Union”. He added that the implementation of these four agreements will stimulate both local development and wider growth in Mozambique.

During his visit, Manservisi is due to meet President Filipe Nyusi and attend the Ministerial Meeting of the Portuguese-speaking African Countries and Timor-Leste (PALOP-TL).

IMF team to analyse Mozambique’s economic state

IMF team to analyse Mozambique’s economic state

A team from the International Monetary Fund (IMF) is expected in Mozambique this week with the $2 billion debt scandal high on the agenda.

IMF spokesman Gerry Rice said on Tuesday, 5 March 2019, that the IMF team is expected to arrive in Maputo on March 8 and will look at monetary policy measures recently adopted by Mozambique’s central bank.

“In addition to the mediated case of hidden debts, the macroeconomic situation in Mozambique and short, medium and long-term perspectives will be part of the IMF staff’s agenda,” Rice said in a statement.

At least 18 officials, including a former finance minister, have been charged for fraud involving $2 billion in loans to state-owned companies in Mozambique in a scandal that has ensnared two major international banks.

Apart from Credit Suisse, Russian lender VTB also arranged financing for Mozambique’s state-owned companies.

The Mozambican government admitted in 2016 to undisclosed lending, prompting the IMF and other donors to withdraw support, triggering a currency collapse and a default on the country’s debt.

Mocuba solar power station to begin operating this month

Mocuba solar power station to begin operating this month

Mozambique’s first solar power plant, located in the district of Mocuba, in the central Mozambican province of Zambezia, is due to begin operation by the end of March according to a report in the daily newspaper “Noticias”.

The forty-megawatt solar power plant covers an area of 170 hectares and has cost 76 million US dollars to construct. The facility will be operated by the company CESOM (Central Solar de Mocuba), which is a public-private partnership owned by Norwegian energy company Scatec Solar (with 52.5 per cent of the shares), Mozambique’s publicly-owned electricity company, EDM, (25 per cent), and the Norwegian Investment Fund, Norfund, (22.5 per cent). CESOM has a 25-year agreement to sell the power to EDM.

The project was funded through equity of 14 million dollars, a grant of 7 million dollars, and project debt of 55 million dollars. The project debt consists of 19 million dollars from the International Finance Corporation (IFC), a concessional loan of 19 million dollars from the Climate Investment Fund, and a syndicated loan of 17 million dollars from the Emerging Africa Infrastructure Fund (EAIF).

A source in the Ministry of Mineral Resources and Energy commented “with the facility coming into operation the centre/north transmission line from Tete will be supplied by an alternative source of electricity. This will create 300 jobs in the construction phase”. The source added that the new electricity supply is of particular importance for Zambezia province as the region has a deficit of electricity for feeding industry and future projects such as the new port at Macuse and the 300 houses to be constructed in the city of Quelimane by the government’s Housing Promotion Fund (FFH).