Mozambique: Infrastructure Developments Driving Economic Growth

Mozambique’s emerging Liquified Natural Gas (LNG) sector is generating sectoral and economic growth and has created a domino effect of improvements through associated infrastructural developments within the transport, power, and urban sectors. As construction on large-scale LNG projects begins, and the Mozambican government actively pursues national economic growth in the wake of the COVID-19 pandemic, there has been an increase in critical infrastructure developments that aim to reduce poverty, boost economic activities and invite an increase in industrialization country wide.  

LNG Boosts Associated Infrastructural Developments

The discovery of large offshore natural gas reserves in Mozambique has prompted multiple LNG developments in the country, as energy and governmental stakeholders move to monetize resources and spur socio-economic growth. As proven reserves begin to attract several international oil companies (IOC) to participate in Mozambique’s rapid sectoral growth, many large-scale LNG infrastructural projects have started to take off. Namely, Total’s Mozambique LNG project – an integrated offshore gas field and onshore LNG facility – and ExxonMobil’s Rovuma LNG project – a 15.2 million tons per annum (mtpa) LNG export facility – are expected to transform the region. Total’s project consists of two liquefactions trains with a combined capacity of 12.8 mtpa pretreatment facilities, and full-containment LNG storage tanks while ExxonMobil’s consists of two liquefaction trains of 7.6 mtpa each, a subsea pipeline corridor, and a multi-purpose dock. With the intention of exporting LNG to both regional and international markets, the two projects and their associated infrastructural developments – such as transport, water, and housing – are seeing significant progress.

Power Infrastructure Expansion

According to the African Development Bank, Mozambique’s role in the Southern Africa Power Pool is growing, thanks to the significant resources that will eventually enable the country to supply regional countries with electricity. By prioritizing the development of power infrastructure across multiple fields – including natural gas, hydropower, solar and wind -, Mozambique is expanding electrification, increasing regional electricity exports, and driving domestic industrialization. With existing established hydropower infrastructure positioning Mozambique as one of the top hydroelectric producers in southern Africa, the country is focusing on infrastructural developments within other sectors.

Specifically, Mozambique is developing a 450MW gas-to-power plant which is expected to be operational in Q4 2021. The plant aims to capitalize on Mozambique’s immense natural gas reserves to provide a reliable and affordable electricity supply to the nation. Additionally, Mozambique is turning to solar developments in a bid to increase domestic power capacity and stimulate socio-economic growth. Recently, the government has launched a tender for the development of three solar photovoltaic projects which will add 120MW to the national grid, as well as commissioned an additional five solar mini grids in 2021. By prioritizing power infrastructure developments, Mozambique is expanding access to electricity and subsequently, increasing economic opportunities across the country.  

Transport Infrastructure: Increasing Connectivity

Mozambique’s transportation sector remains heavily underdeveloped. Out of approximately 30,400km of highway roads, only 18% are paved. The lack of road infrastructure has left the majority of the nation disconnected, acting as a barrier to trade and economic growth. Accordingly, there has been a push for development within this sector, with critical development plans taking precedence in the country. Notably, the government has enacted a Roads and Bridges Management and Maintenance Program to stimulate growth and contribute to poverty reduction through improved road infrastructure.

By enhancing road sector management and expanding networks across the country, the project will significantly improve access within the population. Additional developments include the World Bank’s Southern Africa Trade and Connectivity Project, a road infrastructure project across the Nacala Corridor in Mozambique, Malawi and Zambia. The project involves the development of a logistics highway that links four provinces within Mozambique as well as two neighboring countries – Malawi and Zambia. According to the World Bank, the Mozambican government envisions that this corridor will provide fast, competitive infrastructure for trade and commerce, connecting all major industrial centers and the port of Nacala. The corridor will significantly improve market conditions, reduce trade costs and strengthen regional coordination.  

In addition to road infrastructural developments, Mozambique is focusing on enhancing rail connectivity through several key projects. With rail offering a more cost-effective and environmentally friendly transportation option, the government is boosting development within the sector. Notable projects include the construction of a railway line connecting Zambia, Zimbabwe and Mozambique by United States-based Railnet International. The $11 billion project aims to connect the Copperbelt province in Zambia with Mozambique’s Beira port, travelling through Zimbabwe’s capital city, Harare, and will offer both freight and passenger transport options. With construction works expected to commence this year, the project will significantly expand transportation networks, linking critical trade destinations within the region.

Urban Developments Drive Economic Growth

In addition to expanding infrastructure within rural communities, Mozambique is facilitating critical infrastructural developments within urban areas. In collaboration with the World Bank, Mozambique is revitalizing its capital city through the Maputo Urban Transformation Project. The project, which is supported by a $100 million grant from the World Bank, aims to re-establish Maputo as the country’s economic powerhouse by addressing infrastructural challenges within the water and sanitation sector, and establishing effective urban planning with the development of basic infrastructure and land tenure security. By focusing on these key infrastructural areas, developments are expected to boost national industrialization, poverty alleviation, and structural transformation, contributing to national economic growth through urbanization.

By capitalizing on the country’s abundant natural gas reserves and ensuring LNG and associated developments expand across the entire country, the Mozambican government is driving socio-economic growth and industrialization, while reducing poverty through an increase in country wide connectivity.  

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Africa Oil & Power Transforms into Energy Capital & Power

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