Mozambique bonds rise after TotalEnergies lifts force majeure on LNG project
Mozambique's sole euro bond rallied on Monday after TotalEnergies announced the lifting of force majeure on its multibillion-dollar liquefied natural gas (LNG) project, paving the way for construction to resume following prolonged delays.
The dollar bonds maturing in 2031 climbed over 2 cents, with bids at 89.38 cents on the dollar by 1112 GMT, bringing the yield down to 12.53%, its lowest level in two weeks.
The lifting of force majeure is a positive sign for the project, whose potential export revenue could transform Mozambique's economy, though the 13-metric MMtpy plant is only expected to come online in 2029.
The plant, located in the conflict-prone Cabo Delgado province, is reported to be 40% complete, but regional security concerns persist despite Rwanda-backed military support.
Morgan Stanley strategists Neville Mandimika and Simon Waever said in a note that Mozambique's "near-term fragility and its long-term potential could not be more striking", citing financing constraints and political tensions following election unrest last year.
"Yet, if the country can maintain stability and implement prudent reforms, the LNG boom expected in 2029/2030 could create fiscal space, improve the balance of payments, and support broad-based growth," they added.
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