- AfDB approves $150mn for Mozambique’s Coral North floating LNG project
- Deal reinforces confidence despite security and debt pressures
MAPUTO, MOZAMBIQUE – The African Development Bank has approved $150 million for Mozambique’s Coral North floating LNG project, strengthening funding for a multibillion-dollar export venture despite economic and security headwinds.
In a statement on Thursday, the bank said its board had cleared the financing, describing the offshore development as a “transformative energy infrastructure initiative located offshore Mozambique.” The project is one of the country’s largest energy investments and underpins ambitions to become a major global LNG exporter.
Coral North will be located about 55 kilometres off the coast of Cabo Delgado province, a region that hosts vast gas reserves but has also faced years of security challenges. The project follows the Coral South floating LNG facility, which began operations in 2022 and marked Mozambique’s first entry into LNG exports.
According to the AfDB, Coral North will develop, construct and operate a floating LNG facility with an annual capacity of 3.55 million metric tonnes. The project is led by Italian energy major Eni and is expected to cost more than $7 billion, making it the second production unit in the Rovuma Basin. The bank said the financing will be complemented by “other development finance institutions, export credit agencies, and commercial lenders.”
A strategic bet amid fragile conditions
The AfDB’s participation carries weight. The lender coordinated a $24 billion financing package for Mozambique LNG Area 1 in 2020, then regarded as Africa’s largest foreign direct investment. Its renewed backing offers institutional reassurance to investors at a time when Mozambique’s energy sector has been under strain from insurgency risks in the north.
The announcement followed Eni’s recent hull launch for the project. The company said Coral North is “designed to deliver enhanced efficiency and optimized performances,” adding that it would reduce costs and execution risks, with completion targeted for 2028. “With a 3.6 MTPA liquefaction capacity, Coral North will double Mozambique’s total LNG output to 7 MTPA,” Eni said.
Together with Coral South, the project is expected to make Mozambique Africa’s third-largest LNG producer and exporter, significantly lifting foreign-exchange earnings. Over its life cycle, Coral North is projected to generate more than $20 billion in fiscal revenues, a potential game-changer for public finances.
The timing, however, is delicate. Mozambique is in recession, with the economy in sub-zero growth since the last quarter of 2024. The central bank has warned of heightened debt risks, noting that the “government’s delay in the payment of domestic public debt instruments is resulting in reduced appetite for government securities and rigidity in the interbank money market interest rates.”
For investors and market watchers, the AfDB’s decision signals confidence that LNG can anchor long-term growth—provided security stabilises and fiscal discipline follows.
