Stan­dard Bank and In­dus­trial Com­mer­cial Bank of China to fi­nance Mozam­bique’s $USD8­bil­lion Liq­ue­fied Gas Pro­ject

Zambian Business Times - - FRONT PAGE -

MOZAMBIQUES for­tunes are about to turn­around with a $USD8­bil­lion liq­ue­fied gas pro­ject on the hori­zon. The for­mer Por­tuguese colony has grap­pled with cur­rency volatil­ity, Eurobond -tuna fish - debt re­struc­tures and........

MOZAMBIQUES for­tunes are about to turn­around with a $USD8­bil­lion liq­ue­fied gas pro­ject on the hori­zon. The for­mer Por­tuguese colony has grap­pled with cur­rency volatil­ity, Eurobond -tuna fish - debt re­struc­tures and de­faults plus IMF pro­longed deal ne­go­ti­a­tions on the back of un­earthed $USD1.5bil­lion debt that sent spreads on its 2023 Eurobonds to over 1,700bps to 18.5% re­flect­ing high de­fault risk. Mozam­bique is mak­ing an US$8bil­lion in­vest­ment in a Co­ral Float­ing Liq­ue­fied Nat­u­ral Gas (FLNG), a step taken as a re­gional and global off­shore nat­u­ral gas pro­ducer and sup­plier.

The land­mark en­ergy deal is the first of its kind in the Por­tuguese speak­ing coun­try and prom­ises to trans­form Mozam­bique’s growth prospects. Africa’s largest bank by as­set size and pres­ence the Stan­dard Bank Group - SBG, and its 20% share­holder, the In­dus­trial and Com­mer­cial Bank of China – ICBC (the largest bank in the world) are col­lec­tively the largest lenders to the pro­ject - re­flect­ing the power of their part­ner­ship in driv­ing African growth. Stan­dard Bank has pres­ence in 17 African coun­tries, Zam­bia in­clu­sive.

ICBC plays a crit­i­cal role in this trans­ac­tion by act­ing as the Pathfinder Bank, K - Sure agent, Chi­nese tranche agent and one of the fa­cil­ity ac­count banks. Stan­dard Bank will act as com­mer­cial fa­cil­ity agent, on­shore ac­count bank and se­cu­rity trustee in re­spect of the pro­ject.

“Our sup­port of the fund­ing of the Co­ral FLNG pro­ject grew out of our long-term com­mit­ment to Mozam­bique, con­sis­tently sup­port­ing the coun­try’s po­ten­tial as a fu­ture off­shore nat­u­ral gas pro­duc­tion and ex­port gi­ant,” says Mr. Eard­ley-Tay­lor.

In ad­di­tion to broader ad­vi­sory work cur­rently un­der­way in East Africa, Stan­dard Bank and ICBC’s sup­port for the Co­ral FLNG pro­ject builds on a long his­tory of oil and gas devel­op­ment in Mozam­bique, in­clud­ing Sa­sol, ROMPCO, ENH, CMG, and CMH.

Stan­dard Bank also au­thored Mozam­bique’s land­mark LNG macro-eco­nomic study in­form­ing the devel­op­ment of the 2014 Rovuma Basin De­cree law.

The trans­ac­tion gives life to Stan­dard Bank and ICBC’s broader vi­sion and strat­egy to de­velop East Africa as global en­ergy pro­duc­tion and sup­ply hub – es­pe­cially to East Asia.

Global in­ter­est in Mozam­bique and the re­gion’s po­ten­tial as fu­ture en­ergy sup­pli­ers is re­flected by broad in­ter­na­tional par­tic­i­pa­tion in the deal. Ex­port credit agen­cies, in­clud­ing Co­face (BPI), K Exim, K Sure, Sace and Si­nosure, are joined in this trans­ac­tion by lead­ing global en­ergy gi­ants ENI, Petrochina, GALP, ENH and Ko­gas.

ICBC and Stan­dard Bank be­lieve that this deal is an im­por­tant sig­nal on Mozam­bique’s longer term growth prospects, es­pe­cially the im­pli­ca­tions of this in­vest­ment for fu­ture south­ern and east African en­ergy trade and se­cu­rity.

“This trans­ac­tion demon­strates ICBC and Stan­dard Bank’s vi­sion of driv­ing Africa’s growth by at­tract­ing for­eign di­rect in­vest­ment back into Mozam­bique’s promis­ing en­ergy pro­duc­tion and ex­port sec­tor,” says Mr Eard­ley-Tay­lor. Sig­nif­i­cantly, “this game chang­ing trans­ac­tion puts East Africa on the map as a global en­ergy sup­plier,” he adds

ICBC has been an ac­tive growth part­ner in Africa hav­ing also fi­nanced $USD512mil­lion ZCCM-IH ce­ment pro­ject in Zam­bia which will be the big­gest plant push­ing the South­ern African na­tion in the top 4 ce­ment pro­duc­tion in Africa. Stan­dard bank has also con­tin­ued to stamp its foot­print in Africa’s min­ing, power and in­fra­struc­ture projects.

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