Ambassador’s Opening Remarks at
Day 2 of the Mozambique Gas and Energy Summit
Thursday, September 28, 2023; 9:00am
Joaquim Chissano International Conference Center
(as prepared for delivery)
Good morning, bom dia.
I am pleased to join you for day two of the Mozambique Gas and Energy Summit. Mozambique’s natural gas reserves have the potential to electrify the country and region as well as finance government investments and outlays for education, health and rural infrastructure that would lift millions of Mozambicans out of poverty and create jobs. Mozambique’s resources and leadership in a just transition to clean energy will be crucial for our planet and the global economy.
We cannot talk about energy extraction without talking about climate change. Mozambique knows first-hand the effects of climate change as one of the most vulnerable countries to climate-related disasters.
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 – including the United States – to move to net zero carbon emissions. On September 19, world leaders in New York discussed our shared responsibility in addressing climate change.
President Nyusi: “In the case of Mozambique, due to its geographic vulnerability, the country suffers cyclically of the devastating impact of natural disasters. The latest largest cyclones, I mean Idai, Kenneth and Freddy caused hundreds of losses of life, highly costly damages and losses in the tune of billion dollars. So far, we have not been able to recover just one third of damages recorded.”
The U.S., too, has faced damaging hurricanes, high temperatures and wildfires; President Biden highlighted some of the actions we are taking with partners to confront these climate change challenges:
President Biden: “From the First Movers Coalition, which is mobilizing billions of private-sector commitments to create a market demand for green products in carbon-intense sectors like concrete, shipping, aviation, and trucking; to the Agriculture Innovation Mission for Climate, which is bringing farmers into the climate solution and making our food supply more resilient to climate shocks; and the Global Methane Pledge, now endorsed by more than 150 countries [including Mozambique!] which expands our focus beyond our carbon emission targets to reduce the potential greenhouse gases in our atmosphere by 30 percent in this decade: It’s all within our capacity.”
An important part of the global energy transition to clean sources of power is the role of natural gas. It can act as a bridge fuel that enables countries to remove higher-carbon intensity fossil fuels from their energy mix and bring more renewable sources online. Natural gas is also a source of tremendous economic and development potential, putting Mozambique in a position to contribute to the energy transition and benefit from it. Session six today will cover exciting new efforts toward Carbon Capture and Storage and responsible natural gas extraction.
The vast potential of Rovuma Basin gas has generated nearly $50 billion in proposed investments. This presents a unique opportunity for the private sector at this conference to take part in Mozambique’s energy sector through trade and investment and to help drive the country’s economic growth. American companies have a long history of expertise in LNG and bring their knowledge and experience to Mozambique.
Within the Rovuma Basin, the United States’ Export-Import Bank made a $4.7 billion loan commitment to the Area 1 project. And the U.S. Development Finance Corporation – or DFC – committed $1.5 billion in political risk insurance to the Rovuma LNG project consortium in Area 4. Combined, these projects will potentially produce over 30 million tons of LNG per year, add $15 billion per year to the Mozambican economy, and contribute tens of billions of dollars to government revenues and investments for future generations of Mozambicans over the lifetime of these projects.
If gas is to drive development and prosperity for all, managing this revenue responsibly will be vital. One way is through a sovereign wealth fund, which the Mozambique government and National Assembly are legislating. Many countries with natural resources have failed to utilize their energy revenues in a sustainable, transparent way. A well-designed sovereign wealth fund could be the mechanism to turn Mozambique’s natural wealth into a catalt of development for all citizens. Imagine a national education or health care system as a reference in the region. Imagine record low unemployment rates among youth. Imagine infrastructure that supports commerce, agricultural trade, and travel throughout every corner of the country. Imagine every home with access to electricity and running water. Imagine that the National Assembly mandates future investments – earmarks — in health and education that will deliver tangible benefits to all Mozambican citizens.
The United States, as a key partner for Mozambique, is confident in such a future and currently invests significantly in health, economic growth, security, humanitarian assistance, and education. In northern Mozamique, we are both responding to humanitarian needs and supporting job creation, increased access to education, peacebuilding, and other important programs that help local communities to lead in their own development of a safer, more peaceful future. In July, the USAID Director and I laid the cornerstone of a new secondary school with MINEDUC in Pemba that will train the next generation of engineers. We are supporting a broad range of cultural programs in Cabo Delgado, including a basketball league. I invite all of you in the gas industry to join such efforts at injecting hope in Cabo Delgado. I look forward to hearing from the upcoming panel today on the “Next Energy Generation” of Mozambique’s future leaders.
Mozamique is a country of not just outsized gas reserves, but also ample sources of renewable energy – in hydropower, solar energy, and wind power, as President Nyusi described to the UN General Assembly.
In addition to these renewable sources, Mozambique also has the potential to develop a biofuels industry. The United States has a long history of successfully incorporating biofuels into its energy mix and stands ready to support the Government of Mozambique and local companies in building a domestic biofuel industry here. Just last week we launched a workshop aimed at helping do just that.
The U.S. Government is committed to Mozambique’s energy development. The DFC provided $200 million in financing for the Temane Thermal Power Plant last year, which also received funding and technical assistance from USAID’s Power Africa. Our Trade and Development Agency – USTDA – provided American firm eleQtra’s Namaacha Wind Project with a grant for a feasibility study. This wind project could lead to a 120MW wind farm that would generate 700 jobs. USTDA also provided feasibility study grants to solar projects in the Provinces of Niassa, Nampula, Gaza, and Maputo.
At the U.S.-African Leaders Summit in last year, the White House announced a U.S. Department of Energy proposal to work with Mozambique on a comprehensive assessment of opportunities to expand domestic energy access, support the responsible deployment of natural gas and clean and renewable energy, and add economic value to the production and processing of critical minerals. We recently launched a series of workshops on these topics, and we look forward to delving deeper into these issues in an in-person workshop led by the U.S. Department of Energy with Mozambique early next year.
In closing, we are ready to work together on clean energy development that will help provide Africa with the tools it needs for an equitable energy transition for the future. An equitable, clean, and resilient energy future allows us all to address the climate crisis both now, and for future generations. Our focus is on strengthening local capacity, creating jobs in Africa, and working with our partners and allies to promote economic development that is beneficial, sustainable, and inclusive over the long term.