EXIM Board Votes to Notify Congress of Proposed $5 Billion Financing to Support U.S. Exports to Mozambique LNG Project
August 22, 2019
(Ex-Im Bank)
EXIM Financing Could Support an Estimated 16,400 American Jobs
Washington, D.C. – The board of directors of the Export-Import Bank of the
United States (EXIM) today voted to notify the U.S. Congress, pursuant to the
EXIM charter, of its consideration of a $5 billion direct loan to support the
export of U.S. goods and services from multiple states for the development and
construction of an integrated liquefied natural gas (LNG) project located on the
Afungi Peninsula in northern Mozambique.
At the conclusion of a 35-day congressional notification period, the transaction
may be considered for a final vote by EXIM’s board of directors. Members of
the public may also provide comments on the transaction by September 16 (link is
external).
If finally approved, the transaction would support U.S. exports of goods and
services for the engineering, procurement, and construction of the onshore LNG
plant and related facilities. These U.S. exports are facing direct competition
from financing offered by foreign export credit agencies.
EXIM’s financing 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. Through follow-on sales, thousands of additional jobs may be generated
across the United States.
Through fees and interest earned, the transaction also could create more than
$600 million in revenue for U.S. taxpayers, according to EXIM projections.
The Mozambique LNG project would begin to develop the Rovuma Basin, one of the
world’s most extensive untapped reserves of natural gas. The project is
anticipated to have a transformative impact on Mozambique’s economy during the
expected operational period of the project.
If finally approved, EXIM’s financing would support U.S. exports to the Area 1
concession of the Mozambique LNG project, which covers approximately 10,000
square kilometers and is anticipated to supply up to 64 trillion cubic feet of
gas. 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.
This transaction, if approved, also would further the Trump Administration’s
Prosper Africa Initiative, a whole-of-government economic initiative to
substantially increase two-way trade and investment between the United States
and Africa. Launched in December 2018, Prosper Africa brings together the
resources of more than 15 U.S. government agencies, including EXIM, to unlock
opportunities to do business in Africa and advance American and African
prosperity and security, support jobs, and demonstrate the superior value of
transparent markets and private enterprise for driving growth.
“With the backing of the Trump Administration, U.S. investment in Africa has
taken on a new urgency,” said Secretary of Commerce Wilbur Ross, an ex officio
member of EXIM’s board of directors. “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.”
“America’s energy companies offer the best goods and services in the
world,” said U.S. Trade Representative Robert Lighthizer, also an ex officio
member of the EXIM board. “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.”
Global demand for LNG is expected to continue to rise significantly. The LNG to
be exported by the Mozambique LNG project is targeted primarily to meet the
demand of Asian markets. EXIM staff conducted a detailed economic impact
analysis of the transaction and found that it likely will have a net positive
impact on the economy of the United States.
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