US Exim mulls $5bn loan to Mozambique LNG

The board of directors at the US Export-Import Bank (Exim) plans to vote on whether to issue a $5bn direct loan to the Mozambique LNG project, led by Texas-based Occidental Petroleum. If approved, it would mark the bank’s biggest export financing deal in years.

Exim announced on August 22 it had notified US Congress of its proposal to support the supply of US goods and services for the construction of the LNG export terminal on the Afungi Peninsula in northern Mozambique. The bank’s board will be able to take a final vote on the loan in 35 days.

Mozambique LNG aims to exploit offshore gas resources in the Rovuma basin to produce up to 12.88mn mt/year of LNG. A final investment decision (FID) on the $20bn scheme was taken in June. Occidental entered the project through its takeover of fellow Texas operator Anadarko Petroleum in August.

According to Exim, potential US goods and services to Mozambique LNG are “facing direct competition from financing offered by foreign export credit agencies.” It estimated that its loan would create 16,400 US jobs over a five-year construction period and earn more than $600mn in interest and fees.

Exim regained its full lending powers in May after having them curtailed for almost four years amid Republican opposition in Congress. During that time it could only provide loans and guarantees worth up to $10mn. Congress is set to decide whether to renew the bank’s charter, which expires on September 30.