Japan Loans Mozambique $672M to Develop Access to Resources

Reuters

MAPUTO, Jan 12 (Reuters) - Japan will lend Mozambique 70 billion yen ($672 million) over five years, Prime Minister Shinzo Abe said on Sunday, as the Asian nation seeks to secure access to the East African country's rich coal and gas reserves.

The former Portuguese colony has seen a spike in foreign investment since it hit on huge gas reserves and hopes to use its mineral findings to develop industry and boost its economy, still scarred by the civil war which ended two decades ago.

"(Our assistance) is aimed at securing access to the vast mineral resources Mozambique boasts, namely, gas and coal, as well as agriculture products," Abe told reporters after meeting Mozambique's President Armando Guebuza.

Abe said the loan showed Japan's willingness to help develop infrastructure and would be invested in the country's northern Nacala Corridor Region, which includes a deep-water port and a railway that connects to neighbouring Malawi.

Mozambique, which has some of the world's largest untapped coal reserves, is racing to become the first East African nation to export liquefied natural gas (LNG) after discovering reserves of more than 150 trillion cubic feet off its shores.

That would be enough to supply Germany, Britain, France and Italy for 15 years.

Japan's Mitsui & Co is a partner in U.S.-based Anadarko Petroleum's gas project off the coast of Mozambique, from where it plans to ship its first LNG cargo in 2018.

There has been a spike in demand for LNG in Japan after all but one of the country's nuclear power plants shut down in the wake of the Fukushima nuclear disaster two-and-a-half years ago.

Abe was on the first official visit to Africa by a Japanese prime minister in eight years. His tour includes a stop in Ivory Coast and Ethiopia.

($1 = 104.1450 Japanese yen)

(Reporting by Manuel Mucari; Writing by Xola Potelwa; Editing by Sophie Hares)

Copyright 2017 Thomson Reuters. Click for Restrictions.

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