Putin signs energy and security deals with Mozambique…US also seeks a piece of the action


MOZAMBIQUE President Filipe Nyusi signed energy and security agreements with Russian President  Vladimir Putin on Thursday in the first visit by a leader from the southern African state in two decades.

Nyusi’s visit came weeks after his government signed a peace deal with former rebel movement Renamo and just two months before elections  where the Mozambican leader will seek a second term.

Russia has been looking to expand its influence in Africa and oil and gas producer Mozambique already signed a debt swap agreement with Moscow in 2017.

‘On the commercial and economic side our relations are still modest,’ Putin said after signing the accords. ‘But we have good prospects.’

Bilateral trade between the two countries was $115 million in 2018.

The two countries have historic ties stretching back to the 1960s when Soviet Moscow supported Marxist-inspired fighters against Portuguese colonial rule.

Thursday’s agreements include co-operation between the two countries’ interior ministries on information protection and a deal with Russian oil producer Rosneft.

‘We have natural resources and we expect Russian investments to use those resources for the good of the people,’ Nyusi said in an interview with Russian news agency Tass, published ahead of his meeting with Putin.

Mozambique is looking to develop natural gas reserves that could make the African state a major exporter of liquified natural gas.

An emerging threat is an Islamist insurgency in the country’s north. In 2018, Russia and Mozambique agreed to send Russian military advisers to the country.

In another development, the US Export-Import Bank (EXIM) said on Thursday its board intends to vote on a $5bn direct loan for the development of a liquefied natural gas (LNG) project in Mozambique, the bank’s biggest export financing deal in years.

The government export lender said it has notified the US Congress of the transaction, which will be ready for a final board vote in 35 days.

If approved, the transaction would support US exports of goods and services for the engineering, procurement and construction of the onshore LNG plant and related facilities on the Afungi Peninsula in northern Mozambique.

EXIM said over the five-year construction period the financing could support 16,400 American jobs among suppliers in Texas, Pennsylvania, Georgia, New York, Tennessee, Florida and the District of Columbia.

It estimated interest and fee income from the transaction of more than $600 million from a consortium led by Occidental Petroleum Corp.’s recently acquired Anadarko Petroleum.

US exports to supply the project, however, face competition from financing offered by foreign export credit agencies.

The project would be the single biggest financing deal since EXIM’s full lending powers were restored in May with the confirmation of three new board members. That ended a drought of nearly four years in which the bank could not approve loans and guarantees of more than $10 million due to a protracted fight in Congress over its future.

The bank, seen by some conservatives as providing taxpayer-backed ‘corporate welfare’ and ‘crony capitalism,’ was unable to finance major infrastructure projects like the Mozambique LNG plant and commercial aircraft built by Boeing. It needs Congress to renew its charter before September 30 to keep operating.

President Donald Trump’s administration views the bank as a tool to boost US exports in an increasingly competitive trade environment.

‘This critical project is not only a win for American companies and workers, supporting over 10,000 jobs in the United States, but also for the people of Mozambique as well,’ US Commerce Secretary Wilbur Ross said in a statement.

EXIM said the Mozambique LNG project would begin to develop the Rovuma Basin, one of he world’s most extensive untapped reserves of natural gas, with a major impact on Mozambique’s economy.




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