Despite defaulting in 2017 and a dispute with the IMF about some $2bn in undisclosed state-backed loans, a consortium of international investors and energy companies will invest $8bn in Mozambique to develop the Coral Floating Liquefied Natural Gas project.

The project – an offshore facility floating 90km off the coast – is the first of its kind in Africa, and only the fourth in the world.

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“Mozambique gas has been talked about a lot, and now notwithstanding the fall in oil price and the default, the largest ever project finance deal in Africa has been done in Mozambique,” said Paul Eardley-Taylor, head of oil and gas for southern Africa at Standard Bank, one of the financiers.

The deal was closed in mid-December 2017, but was only made public in January. Equity partners include energy giants ENI and Exxon Mobil, each with a 25% stake. China National Petroleum Company has taken a 20% stake, while Galp, Kogas and ENH, the Mozambican national oil company, took 10% each.

The UK’s BP has committed to purchasing 100% of the downstream product. Investors expect production to begin in mid-2022.

Despite Mozambique's ongoing financial difficulties (the IMF forecasts the national debt-to-GDP ratio to be 106% for 2017) and some recent security issues, the government and investors believe this deal represents a turning point.

Two large-scale onshore LNG deals led by Anadarko and and Exxon are expected to close in 2020, solidifying Mozambique as a regional energy hub.

Standard Bank, together with its shareholder Industrial and Commercial Bank of China are Coral LNG’s largest single lenders, with a $75m commitment.

Though the amount is not huge, having a commercial bank involved was key to sourcing other finance. “It was important because despite sovereign default and other challenges in Mozambique, it was a demonstration that a well-structured deal could still get commercial funding there,” said Mr Eardley-Taylor. “There is a large Chinese tranche, and they looked to the commercial financing for indication of where the market was.”