Washington, D.C. /Maputo, DC, November 12, 2004.—
The International Finance Corporation, the private sector arm of the World Bank Group, has successfully concluded a mandate advising the Government of Mozambique on the selection of a coal developer for the Moatize Coal Deposit in Tete Province. The winning bidder, announced today, was a consortium headed by Companhia Vale do Rio Doce (CVRD) of Brazil. It bid $122.8 million for the rights to explore and develop the coal deposit.
CVRD’s winning proposal includes a robust exploration program for the development of a coal mine, expected to lead to annual production capacity of 21 million tons run-of mine per year. It also includes feasibility studies for the development of a mine-mouth coal-fired power plant with a capacity of up to 1,500 MW, the development of adequate port facilities, and a rail link to the intended port. CVRD will also assess various other domestic industrial projects linked to the mine, including coking, steel, cement, aluminium smelting, and ferroalloy plants.
Mozambique’s Minister of Mineral Resources and Energy, Mr. Castigo Langa, emphasized the very high technical quality of the proposal. He noted, in particular, that 10 percent of the shareholding of the coal developer would be opened for the participation of Mozambican nationals and that it was forecast that over $50 million would be spent on projects to benefit the local community, including $6.5 million in the exploration phase alone.
Bernie Sheahan, Director of IFC’s Advisory Services Department, said, “IFC was pleased to be a part of this process. It will lead to sustainable investment in Mozambique and make a significant contribution toward poverty alleviation in the Zambezi region. The project is also a landmark in south-south cooperation and will contribute to capacity building and technology transfer to the Mozambican economy.”
This operation represents the eighth successful transaction IFC has advised on in sub-Saharan Africa since 1995. Other transactions include Kenya Airways, Uganda Telecommunications, and Gabon Water and Electricity.
Richard Ranken, IFC Director for Africa, noted, "IFC's participation in this highly successful transaction is part of the Corporation's commitment to supporting and strengthening the private sector in Mozambique."
In concluding this transaction, IFC benefited from the donor support of the DevCo facility, funded by the UK Department for International Development (DFID).
IFC’s Advisory Services Department (CAS) provides advisory assistance, primarily to governments, on private-sector participation in the provision of infrastructure services and the restructuring of state-owned enterprises. The services help to establish public private partnerships through which governments can bridge the need for increased services under budget constraints with the benefits of private sector expertise, management and finance.
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses.
