Connect 400,000 families a year

Mozambique Electricity (EDM) plans to connect 400,000 families a year to the public electricity grid, and accomplish universal access to electricity by 2030, the company has announced.

Quoted in today’s Noticias, EDM Executive Director Carlos Yum says that 165,000 new families had been connected to the national grid by September this year, and that the rapid expansion of connectivity was being helped by the introduction of a new process of buying electricity meters.

“Thanks to the changes introduced, EDM currently has just over 278,000 electricity meters in its warehouses throughout the country and will from now on receive between 50 and 60 thousand electricity meters a month, to be used for both new connections and replacements,” Yum said.About eight million Mozambican families have access to electricity, and the government wants all households to be connected in the next 12 years.EDM’s executive director said that the company was committed to strengthening the public grid and would build new electric power transmission lines in Maputo province in a project budgeted at US$250 million and financed by Exim Bank of India.

US$5.7 billion

Foreign direct investment (FDI) is expected to double to US $ 5.7 billion next year, compared to the US$2.8 billion in 2018, according to the draft 2019 State Budget submitted to parliament a few days ago.According to forecasts, the inflow of foreign capital into the country will be the second-highest figure since 2010. The draft 2019 State Budget, which “O País” has seen, notes that the highest-ever figure was recorded in 2014, when Mozambique absorbed about US$6.1 billion.The new wave of foreign direct investment comes at a time when the country expects to receive billions in oil and gas industry investments, especially Anadarko’s Dolphin Tuna project.The final investment decision on this multinational project, involving amounts of around US$30 billion dollars, is expected to be taken in the first half of 2019.

Debt restructuring

IHS Markit consultants said on Monday that the probability of restructuring Mozambique’s public debt continuing until 2021 is now ‘high’ as the parties involved may want to wait until there is a new government in the country.

The problem goes back to the default on the payments of public securities issued in 2016 worth $727.5 million and the loans taken out by Mozambique Asset Management (MAM) and ProIndicus, worth over 1.4 billion that led to the country’s sovereign debt being considered ‘junk’ and the suspension of budge’support by international donors.

Nevertheless, the analysts at IHS Markit wrote that it was unlikely that the creditors (Credit Suisse and VTB bank) would take Mozambique to court, particularly as the debt was never officially recognised

“Any legal action taken by these banks will end up in the British courts and could be a lost battle as the government of Mozambique has still not recognised the secret loans, apart from the Ematum bonds, which were legalised when they were converted into sovereign debt”, the analysts added.

Regardless of the debt resolution scenario (the finance minister recently said he hoped to reach an agreement with the creditors by the year’s end), IHS Markit “maintains the opinion that a restructuring of the debt and the restart of assistance from the IMF and other donors are needed to put the country back on a more sustainable path”.