Ambassador’s Opening Remarks at
Day 2 of the Mozambique Gas and Energy Summit
Thursday, September 15, 2022; 9:00am
Joaquim Chissano International Conference Center
Excellencies, Meus Senhores, Minhas Senhoras, Todo protocol observado
Good morning, bom dia.
It is an honor to join you for Day 2 of the Mozambique Gas and Energy Summit. In my short time here as the U.S. Ambassador to Mozambique, it has become clear to me that Mozambique is well-positioned to provide Mozambicans, Africans, and the world with sources of cleaner, lower carbon energy. This leadership role is a crucial one for our planet and for the global economy. This morning, I would like to share some ideas of how we can drive the change to a cleaner, more just energy future.
First, Mozambique knows the effects of climate change as one of the most vulnerable countries to climate-related disasters, making the global energy transition more important than ever. Leaders in the energy sector – all of you – are at the forefront of this generation’s most existential threat. It will take significant efforts by all countries and players to move to net zero carbon emissions by mid-century to meet the Paris Accord’s goal of limiting global temperature rise to 1.5 degrees Celsius. But together, we can do it and do it in a way that creates jobs and stimulates development.
In this regard, I would also like to take a moment to applaud the Government of Mozambique’s decision to sign onto the Global Methane Pledge. This reflects the government’s commitment to develop its plentiful reserves responsibly and ensure that they fulfill their role as a bridge to a more sutainable future. Rapidly reducing methane emissions is the most effective strategy to limit global warming in the near-term. U.S. industry already meets some of the highest global standards on methane emissions, and we stand ready to help Mozambican entities and operators achieve the same standards.
Mozambique has a major role to play, not only in the energy transition, but in its destination. This is a country of not just outsized gas reserves, but also ample sources of renewable energy in three key areas:
- Mozambique has amongst the largest hydropower generation potential in Sub-Saharan Africa.
- SolarPower Europe estimates that Mozambique has 23,000 Gigawatts (GW) of solar energy generation potential.
- And the Mozambican Energy Fund estimates that Mozambique has 4.5GW of potential wind power.
There is significant potential here. Mozambique has already recognized this in its 25-year strategic plan, which calls for an increase in capacity across these three renewable energy sources.
And just last month, President Nyusi included biofuels as part of his administration’s Econonic Stimulus Package, which could drive a new, renewable industry and create new offtakers for Mozambique’s many agricultural producers. The U.S. has a long history of successfully incorporating biofuels into its energy mix, and we are ready to support the Government of Mozambique and local companies to build a domestic biofuel industry here while promoting food security.
The U.S. government has shown its commitment to Mozambique’s Energy Sector. The U.S. Development Finance Corporation (DFC) provided $200 million in financing for the Temane Thermal Power Plant earlier this year – to be discussed in the Spotlight Session at 0915, which also received critical funding and technical assistance from USAID’s Power Africa and the U.S. Trade and Development Agency (USTDA). We provided American firm eleQtra’s Namaacha Wind Project with a feasibility study grant. This wind project could lead to a 120MW wind farm that would generate 700 jobs – if government authorities at different levels will allow it to move forward. USTDA also provided feasibility study grants to solar projects in the Provinces of Niassa, Nampula, Gaza and Maputo. Power generation will contribute to the “Energia Para Todos” goal of universal access to electricity by 2030.
In all of these areas, American companies are both willing and experienced partners for Mozambican companies. American companies lead in the latest technologies related to responsible natural gas extraction and emissions control as well as Carbon Capture and Storage (CCS) that will contribute to Mozambique’s COP26 commitment of reducing emissions by 72% by 2030. They understand the need to implement energy projects in ways that are mindful of environmental and social concerns. And they contribute to a better business environment by adhering to U.S. Foreign Corrupt Practices Act obligations.
Even as the United States has aligned its prioritities with the global imperative to engage in the energy transition, we also recognize the importance of natural gas projects and the role of gas as a bridge fuel and a source of tremendous development potential. All eyes are on the Rovuma Basin liquified natural gas projects. ENI and its partners in the Area 4 consortium have already launched the Coral Sul Floating LNG project, a real accomplishment and a testament to what is possible with the latest technology in the energy field.
Onshore, the United States’ Export-Import Bank continues to support its $4.7 billion loan commitment to the Area 1 project. DFC – has extended $1.5 billion in insurance to the Rovuma LNG project consortium in Area 4. Together, these American investments will be the largest in Africa.
We are also focused on ensuring that peace and stability return to the region. Terrorist attacks that have plagued northern Cabo Delgado for five years have now spilled into neighboring northern Nampula province. In addition to responding to immediate humanitarian needs on the ground, the United States is also investing in programs that will allow for the safe return to neighborhoods previously destroyed by terrorists. Additionally, we support job creation, increased access to education, and other important development programs to build community resilience and to prepare communities to benefit from the large investments in Cabo Delgado that will be required to liquify natural gas onshore. But this work can’t be done by any one partner or company or one layer of government. It requires all of us to imagine a more prosperous Capo Delgado and to work to implement this vision.
What needs to be done? Government reconstruction priorities are outlined in the Reconstruction Plan for Cabo Delgado (PRCD). Government, donors, and the private sector are already implementing many projects. The U.S. Congress provided funding this month that will give us the resources and flexibility to quickly address some of these priorities. For example, USAID plans to construct a priority high school construction project in Pemba that will help address secondary school education needs. That will fill a gap identified by government.
Looking to the medium-to-long term, the Mozambique Council of Ministers approved a plan (Programa de Resiliência e Desenvolvimento Integrado do Norte de Moçambique PREDIN) for overall development objectives in the three northern provinces of Mozambique just last month.
Three principles articulate HOW this plan should be operationalized:
- Focus and participation of youth in the implementation of activities;
- 50% of beneficiaries should be women. (Check out the 11:15 Success Story of the Mozambique Women of Energy)
- Utilization and developmen to local labor, i.e. from the localities in Cabo Delgado – Subject of Session 8 on Local Content at 11:20 am.
What can you do? Even as final investment decisions in some projects remain pending, I would encourage all of you here today interested in the Gas and Energy Sector in Mozambique to continue or start investing in the youth of Cabo Delgado:
- There are many roads that need building across the province.
- There are are schools and clinics that need to be rebuilt.
- There are welders to be trained.
- There are sports teams to be sponsored.
While the private sector cannot and should not supplant the role of government and civil society, the experience that many companies have gleaned from countries around the world should be shared. For example, the Texas Oil & Gas Association highlighted that:
Exxon champions numerous programs that aim to inspire and prepare students for a career in the energy industry, including STEM camps, professional development camps for STEM teachers and “Introduce a Girl to Engineering” events featuring company employees demonstrating their experiences within the energy industry.
The Energy Institute in Houston was the first high school in the U.S. created for the sole purpose of preparing students for careers in the energy sector and is backed by strong partnerships from multiple Texas oil and natural gas companies. These partners host field trips, provide guest speakers, and fund student activities.
I hope some of the companies in this room will step forward to develop an Energy Institute in Pemba or Palma!
When the Area 1 and Area 4 onshore projects move forward, they are expected to eventually produce millions of tons of LNG per year, add $15 billion per year to the Mozambican economy, and contribute tens of billions of dollars to government revenues over these projects’ lifetimes.
If natural gas is to drive development, stability, and shared prosperity, managing this revenue through a sovereign wealth fund will be vital, the development of such is something the Mozambique government has already put into motion. In addition to gathering consensus from various players and stakeholders, incorporating international best practices, such as oversight by an independent board, will be key to success. We are pleased that the Government of Mozambique has announced that it is actively working on draft legislation for such a fund that will soon be presented to Parliament – and will be discussed this morning in Session 9 at 11:50 am.
In Texas, 99% of oil and natural gas royalties support Texas public education to the tune of nearly two billion dollars a year. A Mozambique Sovereign Wealth Fund could do something similar to fund world-class, educational opportunities for students in Cabo Delgado and beyond.
Our focus and your focus should be on strengthening local capacity, creating Mozambican jobs, and working with our partners and allies to promote economic development that is beneficial, sustainable, and inclusive over the long term.
In closing, I would like to emphasize that the United States government and U.S. companies are strategic partners for Mozambique as it develops its energy resources alongside its human resources. With opportunities ranging from natural gas to hydro and other renewables, we are strongly committed to seeing Mozambique achieve its energy goals, energia para todos.
Together, we can drive the change to a cleaner, more just energy future.
Thank you very much. Muito obrigado.