Communication - Presse
Total’s LNG-Project Revival Crucial for Mozambique to Pay Debt
Mozambique’s ability to keep servicing its rising debt pile depends on the resumption of TotalEnergies SE’s $20 billion liquefied natural gas project, according to S&P Global Ratings.
The project, once touted as Africa’s biggest private investment, stalled in 2021 following terror attacks by Islamic State-linked rebels in Mozambique’s northeast. Progress in containing the violence has led to speculation that work may resume in the coming months, but TotalEnergies has yet to make a decision.
Patrick Pouyanne, chief executive officer at the French oil and gas major, said in February he’s in no hurry to resume. Yet Mozambique faces growing debt payments that might be difficult to meet without revenue it had been banking on from the project.
Yearly coupon payments on the nation’s sole $900 million eurobond jump to 9% from 5% next year. Principal payments of $225 million start from 2028.
Mozambique’s ability to keep servicing its rising debt pile depends on the resumption of TotalEnergies SE’s $20 billion liquefied natural gas project, according to S&P Global Ratings.
The project, once touted as Africa’s biggest private investment, stalled in 2021 following terror attacks by Islamic State-linked rebels in Mozambique’s northeast. Progress in containing the violence has led to speculation that work may resume in the coming months, but TotalEnergies has yet to make a decision.
Patrick Pouyanne, chief executive officer at the French oil and gas major, said in February he’s in no hurry to resume. Yet Mozambique faces growing debt payments that might be difficult to meet without revenue it had been banking on from the project.
Yearly coupon payments on the nation’s sole $900 million eurobond jump to 9% from 5% next year. Principal payments of $225 million start from 2028.
“It’s really critical for these gas projects to come online and for them to be able to generate the revenue,” Leon Bezuidenhout, sovereign analyst at S&P, said in an interview last week. “Even now there’s still pretty high debt-servicing costs before the ramp up in these eurobond payments.”
