Mozambique plans wealth fund to manage gas revenues

MAPUTO - Mozambique plans to set up a sovereign wealth fund to manage revenue from the exploitation of gas reserves in its restive north, the country's President Filipe Nyusi said on Tuesday.

Speaking in the capital Maputo, as he announced a series of measures to help the country's struggling economy, Nyusi said the fund would guarantee transparent management of income and help development in the nation - one of the world's poorest.

"We want to create and implement the sovereign wealth fund of Mozambique, which will have a robust regulatory framework to ensure hydrocarbon revenues are used in a transparent way," Nyusi said.

"We want a sovereign fund to develop the country and ensure its future, especially in times of adversity," he said, explaining the money would help the country ward off "external shocks" and "revenue volatility".

Vast natural gas deposits were discovered in the northern province of Cabo Delgado in 2010, the largest ever found south of the Sahara. Once tapped, Mozambique could become one of the world's 10 biggest exporters.

Since then, the Muslim-majority province has attracted three mega-projects: TotalEnergies' Mozambique LNG, ExxonMobil's Rovuma LNG, and ENI's Coral-Sul FLNG.

But since 2017, the region has been hit by insurgency waged by militants linked to the Islamic State jihadist group, which has stalled progress.

Nyusi said the wealth fund should become operational "before the start of the greatest flow" of gas from the area, hinting that might not happen until after 2024, and warning the country had an "expectation management problem".

Of the three projects, only ENI's is on track.

The Italian company's LNG facility is entirely offshore and the firm expects its plant, which can produce 3.4 million tonnes of liquefied natural gas a year, to start exporting gas in the coming months.