Originally published in Foreign Policy, May 12, 2023.
In 2010, Mozambique discovered massive offshore natural gas reserves that promised to transform the country’s economy. Mozambique’s current GDP is around $15 billion; the government expects sales from liquefied natural gas (LNG) to bring in $95 billion in revenue over the next 25 years. Mozambique may be rich in resources, but it is also one of Africa’s poorest countries—and cannot, by itself, provide the investment required to build the infrastructure to extract, distribute, and export the gas.
Despite the clear development case, the question remained about whether the World Bank—one of the largest sources of infrastructure finance in the world—and various Western countries would continue to participate in Mozambican gas projects. Previously, Mozambique received financing from several rich-country governments to extract and export gas, and the U.S. International Development Finance Corporation also provided support for a domestic gas-fired power plant. However, increasingly restrictive policies on public support for fossil fuel development have caused a wide withdrawal from these types of projects.
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