Japan’s Abe Pledges Funds to Help Mozambique Energy Sources Grow

Jan 12, 2014 10:21 am ET

Jan. 12 (Bloomberg) -- Japanese Prime Minister Shinzo Abe pledged to invest 70 billion yen ($672 million) in development projects in Mozambique during the next five years as he seeks to secure natural gas supplies from southern Africa.

“We signed today some important protocols to strengthen the bilateral relationship,” Abe said in the capital, Maputo, after meeting with President Armando Guebuza.

Abe said the funds must finance natural resources and environment projects. Guebuza said Abe agreed to consider his request for support to develop the country’s coal-power industry as Mozambique aims for more sources of electricity.

“We expect to diversify and strengthen cooperation at all levels,” Guebuza said in a news briefing.

Japan, the world’s biggest importer of liquefied natural gas, has been seeking new energy sources after the Fukushima nuclear disaster. The world’s third-largest economy has been without nuclear power, which accounts for about a quarter of its energy needs, since September as all of the country’s 50 reactors have been shut pending safety reviews.

Abe is on a three-nation African tour, the first visit to the continent by a Japanese leader in almost eight years. He arrived in Ivory Coast two days ago and will head to Ethiopia’s capital, Addis Ababa, tomorrow.

Mozambique’s offshore fields may hold enough gas to meet global demand for more than two years, according to Empresa Nacional de Hidrocarbonetos, the national oil company.

The southern African nation, located on the east coast of Africa, plans to build four LNG units with a total capacity of 20 million metric tons a year by 2018, making it the largest LNG export site after Ras Laffan in Qatar. Chiyoda Corp., based in Yokohama, is among the companies bidding for contracts to construct the plants, which may cost $20 billion.

--With assistance from Mike Cohen in Cape Town. Editors: Eric Coleman, Marco Bertacche