The Economist Intelligence Unit (EIU) said yesterday that the US$189 million financing from the World Bank’s International Finance Corporation (IFC) to the Mozambique Electricity company showed that the country could source concessional loans despite its difficulties.

“The agreement is important because it confirms our view that state-led projects in Mozambique still gain access to some concessional financing, even though the government is in financial default on sovereign debt securities and the International Monetary Fund believes that the country is suffering from debt distress,” the experts of the British magazine The Economist analysis unit write.

Commenting on the agreement in an analysis sent to investors and to which Lusa has had access, researchers say they believe that the financing of nearly US$190 million (about EUR 152 million) by the World Bank’s financial wing to the Ressano Garcia Power Plant, 51 percent owned by Mozambique Electricity (EDM) and 49 percent by South Africa’s Sasol, is a good harbinger for other investments.

“This is positive for the expected development of other infrastructure projects, although it does not change our prediction that the government itself will have difficulty mobilising international funding,” analysts say.

In the analysis, the EIU further notes that the agreement shows that EDM’s finances “are still strong enough to guarantee investors their ability to repay debts” and, lastly, that it represents a financial boost for South Africa’s Sasol.

The thermal power plant was US$250 million investment and is supplied with natural gas sourced by Sasol in Pande and Temane in Inhambane province.

The gas is transported to the border of South Africa by an 865-kilometre pipeline, where it feeds 18 gas turbines with a production capacity of 175 megawatts, destined mainly for the southern part of Mozambique.-COM