Mozambique 4 May: Can gas project finance survive repeated sovereign downgrades?

Good afternoon. This week, Fitch became the first of the ‘big three’ credit rating agencies to publish an opinion on what the ProIndicus and Mozambique Asset Management debt revelations do to Mozambique’s credit rating – no surprise, they don’t improve it.

SEE: Fitch downgrades Mozambique as Moody’s ducks ProIndicus questions

Mozambique’s downgrades make the national oil company, ENH, the “weak link” in the consortia trying to pull together finance to get their offshore gas projects up and running, ENH Chairman Omar Mitha told Zitamar News in an interview published today.

The interview, conducted at last week’s MMEC conference in Maputo, will be published in two parts. Today’s covers the challenges of financing the projects given the global low oil price and Mozambique’s debt crisis.

Tomorrow, Part 2 discusses the potential entry of Exxon into Mozambique; the planned African Renaissance gas Pipeline; and progress to date on the Pemba Logistics Base. A must-read for anyone working in the oil and gas space in Mozambique.

READ PART 1 HERE: Mozambique LNG can break even at current oil price, says ENH head

Portuguese news agency Lusa is reporting today that the donor group formerly known as G-19, now G-14, has decided to suspend financial aid to the Mozambique government – although Portugal, which currently leads the group, has yet to make a formal statement. Such a move is made more delicate by the Portuguese President’s visit to Maputo this week.

One donor which appears unfazed by the sovereign debt crisis is China, which said last month that Mozambique is one of its “priority partners” for co-operation on infrastructure and industrial development. Zitamar analysed how this could further complicate Western donors’ aid dilemma.

SEE: China says Mozambique is “priority partner” for further investment

Have a great week.
 

RECENT POSTS

• Mozambique LNG can break even at current oil price, says ENH head

• Fitch downgrades Mozambique as Moody’s ducks ProIndicus questions

• China says Mozambique is “priority partner” for further investment

• New Mozambique rail-to-port project awaits government approval

• European Union set to follow World Bank lead on Mozambique aid