Through thick and thin, the United Arab Emirates has been a longtime supporter of Egypt in the fight to defeat political Islam, until now. Libya has shown itself to be the one thing that will divide these longtime allies.
USA’s DFC approves transactions to Mozambique totalling $1.7 billion
The US International Development Finance Corporation (DFC), Donald Trump’s secret weapon to counter Chinese influence in Africa, has devoted almost half of its new investment funding to natural gas projects in Mozambique.
Launched in January by the American government, the US International Development Finance Corporation (DFC) has demonstrated its expanded reach, especially in East Africa, with its latest investment. According to a press release dated 9 September, over the third quarter of 2020 the agency approved investments totalling more than $3.6bn worldwide, with nearly half of this amount allocated to transactions in Mozambique.
“We are also hard at work building out a regional team in Africa that will work to source deals in key sectors like critical infrastructure and technology,” said Adam S. Boehler, CEO of DFC, who specialises in healthcare investment.
Since its creation at the end of 2019, the US agency, with an investment cap of $60bn, injected $25m into a fund managed by SPE Capital, a private equity firm with offices in Tunis and Casablanca, and $30m into AfricInvest’s new pan-African fund.
Political risk insurance deal
In Mozambique, the agency, which consolidates the work previously carried out by the United States Agency for International Development (USAID) and the Overseas Private Investment Corporation (OPIC), has approved a $1.5bn political risk insurance deal to support the Rovuma LNG natural gas project, which is under development in northern Mozambique by US oil and gas major ExxonMobil and Italian oil company ENI.
This megaproject, alongside the nearby Mozambique LNG project launched by US-based Anadarko and acquired by French supermajor Total in September 2019, is expected to transform the former Portuguese colony into a global liquefied natural gas (LNG) exporter.
The political risk insurance deal “will support the development, construction, and operation of an onshore liquefaction plant, along with supporting facilities”, reads DFC’s press release. The agency also emphasises that Rovuma LNG will eventually “increase Mozambique’s GDP by an average of $15bn per year” and bring about “significant associated GDP benefits […] to sectors beyond oil and gas”.
Power generation project funding
Mozambique’s $200m in remaining aid will be granted as a loan to finance the construction of a 420 MW gas-fired power plant at Temane, located 700 kilometres north of Maputo, and a 25-kilometre interconnection line.
The project, carried out by the public utility company Electricidade de Moçambique (EDM) in partnership with a private consortium led by Globeleq and which includes eleQtra and Sasol, received $420m in grants and guarantees from the World Bank in August 2019. Powered by natural gas supplied from fields operated by Sasol and Empresa Nacional de Hidrocarbonetos de Moçambique (ENH), the state-owned hydrocarbon company, the plant will provide electricity to the country, including its capital, Maputo, as well as to neighbouring South Africa.
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DFC’s investment builds on the US government aid previously contributed to the project through USAID and its Power Africa initiative, launched in 2014, which covered technical assistance for the construction of a 560-kilometre transmission line.