Africa Monitor

Africa Monitor Intelligence

Mozambique: China to Profit From Debts to Brazilian Companies and Divestment

Driven by personal relationships and political lobbying, relations between Brazil and Mozambique were strongly driven by former PR LUIZ INÁCIO LULA da SILVA (LLS) who visited Maputo three times and developed personal relationships with several FRELIMO leaders.
Several of the businesses of Brazilian entities in Mozambique meanwhile ended up in public scrutiny due to the lack of transparency in the contractual conditions.
In the economic domain, Brazil was among the main foreign investors in the country due mainly to Vale's participation in the Nacala Integrated Logistic Corridor (CLIN) project, a situation that gradually reversed with the suspension of several Brazilian investment projects and the withdrawal by Vale from Mozambique - coal mine and CLIN.
The construction of the Moamba Major dam was another project delivered to a Brazilian company, Andrade Gutierrez, with a financing of USD 320 million by the Brazilian National Development Bank (BNDES) and a local credit of USD 110 million.
The BNDES is evaluating the possibility of early settlement of the contract, with outstanding balance and transfer of dam credit obligations to China-Eximbank, with which the Mozambican government has been negotiating. READ MORE