Japan Africa LNG

Japan to invest $14.4 bn in African LNG sector

A banking syndicate led by Japan Bank for International Cooperation and three other private sector banks will provide the loans

Japan is set to invest around $14.4 billion for the development of liquefied natural gas in the African country of Mozambique, the Nikkei Asian Review reported.

The investment will be made jointly by the government of Japan and other players in the business sector such as Japanese general trader Mitsui & Co. and Japan Oil, Gas and Metals National Corporation, or Jogmec.

A banking syndicate led by the Japan Bank for International Cooperation and three other private sector banks will provide the loans, while Nippon Export and Investment Insurance will handle default risk.

The consortium believes that the deal presents an opportunity to secure stable production of LNG over the long term and diversify sources for Japan’s LNG supply.

The arrangement calls for Japan Bank for International Cooperation to lend $3 billion, while the remaining amount will be shared among the African Development Bank and Japanese private-sector banks, including MUFG Bank, Mizuho Bank, Sumitomo Mitsui Banking and Sumitomo Mitsui Trust Bank.

The deal is expected to be one of the largest ever overseas investments in Africa.

The gas field are expected to produce 12 million tons of LNG by 2024, of which about 30 percent will be supplied to Jera, a joint venture equally owned by Tokyo Electric Power Co. Holdings and Chubu Electric Power, as well as to Tokyo Gas and Tohoku Electric Power.

As deposits in the field are estimated to total over 10 times Japan’s annual LNG imports, the companies expect it to produce a stable supply of the resource over many years, the Nikkei reported.

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