Taking a page out of China’s foreign development strategy, the US Export-Import Bank (Exim) is considering a $5bn loan to help build a large liquefied natural gas (LNG) plant in northern Mozambique, saying it would support 16,400 American jobs by guaranteeing orders for goods and construction services.
If approved, the plan would further the Trump Administration’s "Prosper Africa" initiative, designed to boost trade with Africa.
The loan would boost US exports to the Area 1 concession of the project in the Rovuma Basin, which covers around 10,000 sq km and is anticipated to supply up to 64 trillion cubic feet of gas.
Noting that US exports face competition from financing offered by other countries’ credit agencies, Exim’s board of directors yesterday voted to notify Congress of its considerations of the loan.
After a 35-day notification period, the transaction may be considered for a final vote by the Exim board.
The Rovuma Area 1 involves an estimated investment of $25bn, MacauHub reports, with talks over financing having taken place with the export credit agencies of China, Japan, South Korea, Germany and Italy, as well as the US.Â
"With the backing of the Trump Administration, US investment in Africa has taken on a new urgency," said Secretary of Commerce Wilbur Ross, an ex officio member of the bank’s board. "This critical project is not only a win for American companies and workers, supporting over 10,000 jobs in the United States, but also for the people of Mozambique as well."
The bank said the loan could support an estimated 16,400 American jobs over the five-year construction period, including jobs at suppliers in Texas, Pennsylvania, Georgia, New York, Tennessee, Florida, and the District of Columbia.
It claimed that follow-on sales could create thousands of additional jobs in the US.
Furthermore, it projected that $600m in revenue could be generated by fees and interest.
The borrower would be Mozambique LNG1 Financing Company, which is owned by a group of sponsors, including Anadarko Petroleum Company that was recently acquired by Occidental Petroleum Corporation.
"America’s energy companies offer the best goods and services in the world," said US Trade Representative Robert Lighthizer, another ex officio bank board member. "I am pleased that, with this vote by the Exim board of directors, ‘Made in the USA’ products are poised to play an important role in the development of this important energy resource."
Image: A platform, off Mexico, of Italian oil and gas company Eni, which is involved in Mozambique’s Rovuma Basin project (Eni)