Mozambique 5 Oct: The gas can’t come soon enough
Good afternoon. There has been significant progress over the last week towards a final investment decision on one of the huge Rovuma Basin LNG projects. Nevertheless - and despite what a deputy minister said last week - Mozambique’s financial crisis is unlikely to end any time soon.
SEE: Eni aims for Mozambique FLNG decision this month – but finance package will lag
SEE: Eni signs 20-year deal to sell Mozambique gas to BP
The goal of getting first gas by 2021, however, is now no longer possible - meaning the IMF’s somewhat fantastical prediction of 34% economic growth in 2021 has been revised. Their new prediction is much more modest - but of course, anything could happen between now and then.
SEE: IMF slashes Mozambique growth forecast on gas project delays
For instance, the discovery of more secret debts. Aeroportos de Moçambique’s $300m debt doesn’t quite fall into that category, but most of it does benefit from government guarantees that have not been accounted for in Mozambique government debt figures.
SEE: Mozambique airport company accounts reveal $300m state-backed borrowing
AdM borrowed not just internationally but also at home, from banks including Moza Banco which now finds itself under central bank administration after its financial situation became unsustainable.
SEE: Mozambique’s fourth-largest bank under emergency administration
Moza is also rumoured to be one of the banks which lent to Mozambique Asset Management (MAM) - whose government guarantee has not so far been honoured. The central bank says there will be no contagion from Moza’s failure - it would be irresponsible to say anything else - but its peers have made many of the same mistakes it did, betting that Mozambique was on a one-way ride to riches.
SEE: Bank of Mozambique seeks buyer for ailing Moza Banco
Have a great week.
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