Project financing and the state's commitments to the gas sector defined Mozambique's economic week. The Bank of Mozambique (BdM) opened a path for the use of banking reserves to support domestic production, while the prime rate was held at 15.5% for November. In the energy sector, the government reconfirmed its sovereign guarantee of US$2.2 billion to Mozambique LNG creditors, adjusting the instrument to the project's updated financial schedule.

Bank Reserves Unlocked to Finance Production

The BdM has created a mandatory reserve deduction regime in meticais to incentivise new lending directed at import substitution and export diversification.

In force since 28 October, the mechanism allows banks to deduct 110% of the outstanding capital of eligible investment loans and 100% of working capital credits from their mandatory reserve requirements. The intention is to channel part of the resources immobilised at the central bank towards productive activity.

The incentive carries a pricing condition: investment credits are subject to the MIMO rate, currently at 9.25%, while working capital loans are priced at the same rate plus 1.5 percentage points, equating to 10.75%. Both will track future changes to the monetary policy rate.

The scheme will run for 18 months and covers exclusively new loans denominated in local currency. Renewals, restructurings, and substitutions of credits granted before its entry into force are excluded.

Each institution must originate at least 50 new operations every six months, with disbursements equivalent to at least 6% of the average mandatory reserves constituted over the preceding six periods. Banks that fall short of these targets will be required to provide the regulator with a written explanation.

Prime Rate Holds at 15.5% for November

Despite the new productive credit incentive, the prime rate remains at 15.5% for November, marking a seventh consecutive month of stability, according to an announcement published on Friday, 30 October, by the Mozambican Banks Association (AMB).

The rate has been unchanged since May, following three reductions of 10 basis points each in January, March, and April, which brought it down from 15.8% to 15.5%.

Used as a benchmark for the pricing of bank lending, the prime rate does not necessarily represent the final rate charged to individual clients, to which a spread may be added depending on the risk profile of the operation.

The decision mirrors the stance of the central bank, which, at the Monetary Policy Committee meeting of 30 September, kept the MIMO rate at 9.25%. The new reserve regime thus introduces specific conditions for certain productive credits within a market whose general reference rate remains unchanged.

$2.2 Billion Guarantee Reconfirmed for Mozambique LNG

In the gas sector, the government has reconfirmed its sovereign guarantee of US$2.2 billion to the creditors of Mozambique LNG, the project led by TotalEnergies in Area 1 of the Rovuma Basin in Cabo Delgado.

Resolution No. 85/2026 reaffirms the validity of the guarantee originally issued in April 2020, maintaining the maximum amount and the conditions agreed with the project's lenders. It also authorises the minister responsible for finance to issue a confirmation letter adjusting the commitment to the project's updated financial schedule.

The revised documentation sets 25 March 2029 as the completion date stipulated in the financial instruments, referred to as the Completion Date. The government clarifies that the decision confirms an existing guarantee and does not constitute the issuance of a new guarantee or an increase in the maximum guaranteed amount.

Valued at approximately US$20 billion, Mozambique LNG is designed to develop the Golfinho and Atum fields and install two liquefaction trains with a combined capacity of approximately 13 million tonnes per year.

Construction was halted in 2021 due to the security situation in Cabo Delgado. The announced schedule targets the start of production in 2029, keeping the project among the most significant investments to watch in the Mozambican economy.

Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=556778