The African Development Bank (AfDB), Mozambique and Portugal have signed an agreement titled the Mozambique Lusophone Compact – one of a series involving Portuguese-language countries in Africa – to provide investment for major development projects in the country.
The agreement, which was signed in Maputo on Tuesday, foresees access to AfDB finance plus guarantees from Sociedade para o Financiamento do Desenvolvimento (SOFID), a development finance institution owned by the Portuguese state.
Mozambique’s minister of economy and finance, Adriano Maleiane, welcomed the initiative, which he said would help to bring together markets in which Portuguese is used but which are geographically far apart. The same aspect was also highlighted by Mateus Magala, AfDB vice-president, and Teresa Ribeiro, Portugal’s secretary of state for foreign affairs and cooperation, who were also present at the ceremony.
Each AfDB project of this kind must involve, in addition to the host country – which must be one of the Portuguese-language countries in Africa – “at least two more of the Compact’s entities, for example the AfDB and Portuguese companies, or the AfBD and other companies” in Portuguese-language countries in Africa, the programme documentation states.
Through SOFID, Portugal is making available €400 million in guarantees, to be combined with AfDB finance, which under the agreement is to support projects budgeted at $30 million (€26.5 million) or more – the usual minimum for the bank.
Mozambique has 25 indicative projects, presented in the last year through its Confederation of Economic Associations (CTA), in sectors such as education, tourism, energy, agriculture and infrastructure.
The projects are to be scrutinised before the final financing amount is decided.
The agreement signed on Tuesday relating to Mozambique comes under a broader one covering all Portuguese-language countries in Africa under which a total of 65 projects have already been identified. The overall compact was signed by Portugal and the AfDB in November, as part of a broad range of multilateral partnerships announced at the Africa Investment Forum 2018 held in Johannesburg, South Africa.