To ensure its viability, the bank will initially be capitalized by the State in the amount of 500 million dollars. Additional capital will be sourced from development financial institutions, including the African Development Bank and the World Bank, as well as through the issuance of development bonds, as stated in the Economic Recovery and Growth Plan (Prece) recently approved by the Government.
The document further specifies that “the bank’s operation will be governed by rigorous technical criteria to ensure financial sustainability and the economic and social impact of funded projects,” with priorities focused on initiatives with strong multiplier potential capable of creating jobs, enhancing national production, and improving living conditions.
The plan defines the objectives of the Mozambique Development Bank as “attracting and channeling both internal and external resources to strategic projects” in sectors such as energy, industry, infrastructure, agriculture, health, education, and housing, and “promoting the development” of Small and Medium Enterprises (SMEs) with accessible credit and technical assistance to stimulate job creation and economic inclusion.
It also aims to “promote investment in sustainable and priority sectors with a focus on financing areas with high economic development impact, generating social and environmental benefits,” enabling “the reduction of foreign exchange risks by prioritizing financing in local currency to mitigate exchange rate mismatches, making financing more accessible and stable for national beneficiaries.”
The Mozambique Development Bank will be a public financial institution primarily focused on catalyzing the country’s sustainable and integrated development by financing structuring projects that drive long-term economic growth,” the Government asserts, indicating a focus on strategic sectors such as industries, agriculture, tourism, energy infrastructure, transport, water, and sanitation, and irrigation systems.
“By offering longer-term credit with more accessible rates than commercial banks, it will facilitate investments that are currently unfeasible for the private sector or the State due to resource limitations,” the plan concludes.
The Mozambican government initiated public consultations on the regulatory framework for the creation of the Mozambique Development Bank in September.
In his inaugural address on January 15, Daniel Chapo, the fifth President of Mozambique, announced the creation of the Mozambique Development Bank among a broad set of measures to revitalize the economy and support the population.
“We are going to create the Mozambique Development Bank to develop infrastructure, finance, and better drive strategic projects for our country’s progress. With the resources generated by gas assets, we will capitalize this bank and immediately invest in projects that transform the lives of Mozambicans,” stated the head of state.
