Mozambique Approves Over $4.2 Billion In Development Projects

Mozambique's authorities have approved projects totalling more than US$4.2 billion during the first half of 2025, with investment concentrated in the industrial, agro-industrial and tourism sectors.

Gil Biles, director-general of the Agency for Investment and Export Promotion, made the disclosure at the South Africa–Mozambique Business Forum, held alongside FACIM 2025. He identified the Dondo Industrial Park among the standout ventures, characterising it as one of the most substantial and consequential initiatives approved in that period. The government's decisions underscore the rebounding economy and heightened private-sector interest in infrastructure and development projects.

Special Economic Zones, particularly in Nacala, continue to anchor investor confidence. Nacala, Mozambique's first SEZ, now hosts more than 100 active enterprises across industry, agro-industry and service provision-playing a pivotal role in diversifying the economy.

Trade links with South Africa remain robust, with annual trade exceeding US$2 billion. Key exports include aluminium from the Mozal smelter, electricity from the Cahora Bassa dam, cotton, sugar, tobacco, titanium and gemstones. These exports reflect the depth and strategic alignment of the bilateral economic relationship.

Mozambique has also advanced its energy profile through regulatory approvals of major energy projects. In April, the government approved the development plan for Eni's Coral Norte floating LNG platform. The approximately US$7.2 billion project is set to produce 3.55 million tonnes of LNG annually over 30 years, with production expected to begin in the latter half of 2028.

Energy giants such as ExxonMobil and TotalEnergies remain engaged in onshore LNG ventures, although progress has been hindered by ongoing security concerns.

Meanwhile, the United States has played a significant role in reviving one of the largest energy projects in Africa. In March, the US Export-Import Bank re-approved a nearly US$5 billion loan to TotalEnergies for its Mozambique LNG project, initially authorised in 2020 and previously paused due to insurgent violence. The renewed loan unlocks critical financing needed to resume the project, which has suffered prolonged delays.

Security conditions in Mozambique's northern Cabo Delgado region have improved, bolstered by thousands of Rwandan troops. TotalEnergies, which holds a 26.5 per cent stake in the venture, has lobbied intensively to lift force majeure status. Mitsui, holding a significant interest, has affirmed its commitment to the project, citing the country's competitive gas reserves. However, the project still faces reputational and security risks.

Environmental organisations and advocacy groups have voiced strong criticism of the revived funding, warning of climate repercussions, human rights concerns and weak governance. Legal challenges are underway, with allegations that the loan approval bypassed statutory requirements for environmental review, economic assessment and public or congressional input.

The renewable-energy arena in Mozambique also shows signs of growth. The proposed Mphanda Nkuwa hydropower dam on the Zambezi River, estimated at US$4.2 billion, remains in development. The dam would generate up to 1,500 MW and flood nearly 97 km2 of land. The project is controversial due to its implications for resettling over 1,400 families and affecting livelihoods downstream. While the International Finance Corporation has expressed interest, the environmental and social trade-offs remain under scrutiny.

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