MAPUTO, Feb 23 (Reuters) – The World Bank is aiming to provide Mozambique with $6 billion of mostly concessional financing for its public investment projects over the next five years, a senior bank official said on Monday.
The Southern African country’s public finances are under strain, with the International Monetary Fund sounding a warning about worsening debt dynamics last week after an annual review.
“We have a balance sheet of around $3 billion on the bank side, and we’re hoping to mobilise another $3 billion,” Fily Sissoko, World Bank division director for Mozambique, Madagascar, Mauritius, Seychelles and Comoros, told reporters.
Sissoko said the World Bank financing earmarked to support the government’s development strategy was “very concessional” and mostly grants.
The Washington-based lender also hopes to mobilise another $4 billion of funding for the private sector.
Mozambique’s finance minister said the World Bank was developing a $921 million “macro-fiscal support framework”.
“This partnership framework is essentially aimed at ensuring macro-fiscal consolidation, with a view to sustaining economic recovery,” Finance Minister Carla Louveira said.
While optimism surrounds the resumption of a major liquefied natural gas project led by French energy company TotalEnergies , the IMF and others have highlighted significant economic challenges in Mozambique, including debt-service delays and large and persistent fiscal deficits.
The country has been hit by frequent cyclones and floods that scientists say have been exacerbated by climate change.
(Reporting by Manuel Mucari and Custodio Cossa;Additional reporting by Colleen Goko in Johannesburg; Writing by Anathi Madubela;Editing by Alexander Winning and Nick Zieminski)
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