The World Bank may provide support for Mozambique’s natural gas resources if it proves to be the most economical way to boost energy security in one of the world’s poorest countries, a bank official privy to the developments was quoted by World Oil in an article published on Monday, March 13.
While the Washington-based lender ceased financing oil and gas extraction projects in 2019, it may consider such projects in exceptional circumstances that help connect more people to energy in the world’s poorest countries.
Mozambique, with a population of 32 million, has less than a third of its population with access to electricity, while having the sixth-lowest gross domestic product per capita worldwide, according to data from the World Bank.
“If there are no other options that are least cost, and this is in the context of a clearly articulated transition plan, we can support it,” said Victoria Kwakwa, the World Bank’s vice president for Eastern and Southern Africa, in an interview in Mozambique’s capital, Maputo. “It can play an important role in the transition process.”
Situated in southeast Africa, Mozambique discovered some of the largest natural gas reserves on the continent more than a decade ago. However, attempts to exploit these reserves have been delayed by a $2 billion debt fueled by a state corruption scandal and an Islamic State-linked insurgency, with environmental groups opposing fossil fuel development also targeting international funding.
Europe’s search for alternative energy supplies following Russia’s invasion of Ukraine last year has led to the search for new sources, including projects on the African continent. The significance of Mozambique’s natural gas resources has increased in the global arena, according to Kwakwa.
“My sense of Mozambique’s natural gas assets is that it can play an important role in the global transition,” Kwakwa said. “We are seeing that already most of Mozambique’s gas is being exported to Europe, so Europe is benefiting from Mozambique’s gas and keeps Europe also from reverting to less clean energy sources.” Kwakwa suggested that Mozambique should continue utilizing renewable technologies to benefit from the domestic use of gas, emphasizing that natural gas is not as clean as renewables.