Mozambique plans to establish wealth fund for $96b gas project

Mozambique plans to establish wealth fund for $96b gas project

Energy, Uncategorized















Bloomberg

Mozambique plans to establish a sovereign wealth fund later this year as it prepares to start natural gas exports that the government says may generate $96 billion of revenue for the world’s third-poorest nation.

The authorities are in the process of finalising draft legislation that will govern the management of the

fund, Finance Minister Max Tonela said in an interview in Washington.

He expects the fund to be operational before Mozambique’s first liquefied-natural-gas exports begin flowing by October from an offshore project that Eni SpA is developing.

Mozambique needs to ensure that the governance of the fund is “robust enough,” he said.

The southeast African nation’s central bank in October 2020 published a proposed model for the fund, which it said would build up savings and contribute to fiscal stability when commodity prices fluctuate. Under that plan, half of the state’s revenue should go to the fund and the rest to the government’s budget during the first two decades of LNG production.

Since then, the two biggest export projects being developed by TotalEnergies SE and ExxonMobil Corp have stalled because of an IS-affiliated insurgency, while prices for the fuel have