EXIM Board votes to notify Congress of proposed $5 billion financing to support U.S. exports to Mozambique LNG project
The board of directors of the Export-Import Bank of the United States (EXIM) voted to notify the U.S. Congress, pursuant to the EXIM charter, of its consideration of a $5 billion direct loan to support the export of U.S. goods and services from multiple states for the development and construction of an integrated liquefied natural gas (LNG) project located on the Afungi Peninsula in northern Mozambique.
At the conclusion of a 35-day congressional notification period, the transaction may be considered for a final vote by EXIM’s board of directors. Members of the public may also provide comments on the transaction by September 16(link is external).
If finally approved, the transaction would support U.S. exports of goods and services for the engineering, procurement, and construction of the onshore LNG plant and related facilities. These U.S. exports are facing direct competition from financing offered by foreign export credit agencies.
EXIM’s financing could support an estimated 16,400 American jobs over the five-year construction period, including jobs at suppliers in Texas, Pennsylvania, Georgia, New York, Tennessee, Florida, and the District of Columbia. Through follow-on sales, thousands of additional jobs may be generated across the United States.
Through fees and interest earned, the transaction also could create more than $600 million in revenue for U.S. taxpayers, according to EXIM projections.
The Mozambique LNG project would begin to develop the Rovuma Basin, one of the world’s most extensive untapped reserves of natural gas. The project is anticipated to have a transformative impact on Mozambique’s economy during the expected operational period of the project.
If finally approved, EXIM’s financing would support U.S. exports to the Area 1 concession of the Mozambique LNG project, which covers approximately 10,000 square kilometers and is anticipated to supply up to 64 trillion cubic feet of gas. The borrower would be Mozambique LNG1 Financing Company, which is owned by a group of sponsors, including Anadarko Petroleum Company that was recently acquired by Occidental Petroleum Corporation.
This transaction, if approved, also would further the Trump Administration’s Prosper Africa Initiative, a whole-of-government economic initiative to substantially increase two-way trade and investment between the United States and Africa. Launched in December 2018, Prosper Africa brings together the resources of more than 15 U.S. government agencies, including EXIM, to unlock opportunities to do business in Africa and advance American and African prosperity and security, support jobs, and demonstrate the superior value of transparent markets and private enterprise for driving growth.
“With the backing of the Trump Administration, U.S. investment in Africa has taken on a new urgency,” said Secretary of Commerce Wilbur Ross, an ex officio member of EXIM’s board of directors. “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.”
“America’s energy companies offer the best goods and services in the world,” said U.S. Trade Representative Robert Lighthizer, also an ex officio member of the EXIM board. “I am pleased that, with this vote by the EXIM board of directors, ‘Made in the USA’ products are poised to play an important role in the development of this important energy resource.”
Global demand for LNG is expected to continue to rise significantly. The LNG to be exported by the Mozambique LNG project is targeted primarily to meet the demand of Asian markets. EXIM staff conducted a detailed economic impact analysis of the transaction and found that it likely will have a net positive impact on the economy of the United States.
