Mozambique approves Coral Norte gas financing without a state debt guarantee

Overview

Updated 1 hour ago

Mozambique's cabinet approved a financing structure for the Coral Norte floating gas project that lets developers borrow up to 70% of a $7.2 billion budget while keeping the debt off the state's books. A decree dated November 4 sets the ceiling and bars lenders from using guarantees in ways that would touch national sovereignty, regulatory powers or ownership of natural resources.

Coral Norte is the second floating liquefied natural gas plant in the Rovuma Basin, offshore Cabo Delgado. Its backers say it will produce 3.55 million tonnes a year and start up in 2028. Whether the no-state-debt promise holds depends on loan terms that have not been published.

Why it matters

If the structure works, Mozambique can build a second gas export project without repeating the hidden-debt crisis that froze its budget support in 2016.

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Key Indicators

$7.2B

Approved financing ceiling

Maximum investment the decree authorises for the Coral Norte project.

70%

Maximum debt share

Lenders may fund up to this share; partners must supply at least 30% in equity.

3.55 Mtpa

Planned LNG capacity

Annual output the floating plant is designed to produce over a 25- to 30-year life.

25%

Domestic gas commitment

Share of project production reserved for Mozambique's domestic market under supply agreements.

72%

FLNG construction completion

Progress reported at the South Korean shipyard building the floating liquefaction unit.

270 days

Drilling campaign length

Planned window for the Saipem 12000 drillship to complete up to six development wells.

$150M

African Development Bank loan

Senior loan the bank proposed for the project in a January 2026 summary note.

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

Daniel Chapo

President of Mozambique

In office

Claudio Descalzi

Chief executive of Eni

In office

Organizations Involved

Eni

Energy company

Operator and lead partner of Coral Norte

Italian energy group that operates Area 4 and leads the Coral Norte joint venture.

Empresa Nacional de Hidrocarbonetos (ENH)

State oil and gas company

Equity partner; borrower through ENH Rovuma Área 4 Investments FZCO

Mozambique's national hydrocarbon company and an Area 4 partner.

Coral Norte FLNG S.A.

Project company

Special purpose entity owning and operating the floating plant

Mozambican special purpose entity that will own, operate and maintain the Coral Norte facility.

Council of Ministers of Mozambique

National cabinet

Approved the financing structure and related resolutions

Mozambique's cabinet, which cleared the project's financing terms.

International Monetary Fund

International financial institution

Monitoring Mozambique's debt and project timelines

Lender whose 2026 assessment projected ENH debt growth and a later Coral Norte startup.

African Development Bank

Multilateral development bank

Proposed senior lender

Development bank that proposed a $150 million senior loan for Coral Norte.

Timeline

2016 November 2026

9 events Latest: Yesterday

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November 2026
Financing terms made public
Latest Disclosure

Reports detail the $7.2 billion structure, the 70/30 debt-to-equity split and the government's position that the loans create no state debt or fiscal risk.
Yesterday
Decree sets no-state-debt terms
Government decision

Decree No. 68/2026 authorises up to 70% debt financing and creates ENH Coral Norte, SU, S.A., through resolutions 86/2026 and 87/2026.
6 days ago
October 2026
Drillship arrives in Cabo Delgado
Construction

The Saipem 12000 arrives to begin a roughly 270-day campaign targeting up to six development wells.
October 2026
September 2026
Cabinet approves financing structure
Government decision

The Council of Ministers clears the financing framework at its 27th ordinary session, according to the national petroleum regulator.
September 15th, 2026
January 2026
FLNG hull launched in South Korea
Construction

The floating liquefaction unit's hull is launched at a South Korean shipyard, a construction milestone for the vessel.
January 2026
African Development Bank plans $150 million loan
Financing

The bank publishes a project summary note for a $150 million senior loan from its own balance sheet.
January 2026
October 2025
Coral Norte final investment decision signed
Investment

Eni and partners commit about $7.2 billion to the project at a ceremony in Maputo attended by President Daniel Chapo and Eni chief executive Claudio Descalzi.
October 2nd, 2025
June 2022
Coral Sul FLNG starts production
Milestone

The first floating liquefied natural gas plant in Area 4 begins operations, becoming the design and operating template for Coral Norte.
June 2022
2016
Hidden debts scandal hits Mozambique
Financial crisis

Undisclosed borrowing by state companies, estimated by the IMF at $1.4 billion, leads donors to suspend budget support and the fund to cancel a review mission.
2016

Scenarios

First Coral Norte cargo ships by end-2028

Possible Resolves by End of 2028

Discussed by: Eni, the Mozambican government and the national petroleum regulator

Eni and the government target first production in 2028, with the African Development Bank projecting first cargo in the third quarter. The FLNG unit was 72% complete at its South Korean shipyard and the drilling campaign was underway in late 2026. Meeting the date would validate the replica strategy borrowed from Coral Sul.

Startup slips to 2030, matching IMF projection

Possible Resolves by End of 2030

Discussed by: International Monetary Fund

The IMF's 2026 assessment uses a 2030 production start, two years behind the government's target. A slip of that length would push back export revenue and the domestic gas supply commitments tied to the project. Construction or commissioning delays would be the trigger.

Loan terms reveal state exposure despite the decree

Uncertain Resolves by Q2 2027

Discussed by: Mozambican civil society groups and the IMF

The decree says the loans create no state debt, but ENH's equity share still has to be funded and the loan terms have not been published. Mozambican outlet Verdade argues the project adds to liabilities owed to Eni, ExxonMobil, CNPC, ADNOC and Kogas. Publication of the agreements, or an IMF assessment, would settle the question.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

2016

Mozambique's hidden debts (2016)

Undisclosed borrowing by three state-owned companies, estimated by the IMF at $1.4 billion, became public. Donors suspended budget support and the IMF cancelled a review mission, pushing the country into a debt crisis.

Then

Mozambique's currency and creditworthiness suffered, and budget support from international partners froze.

Now

The episode shaped how lenders and the government treat state guarantees, and it remains the reference point for any Mozambican project debt.

Why this matters now

The Coral Norte decree explicitly separates project loans from state liabilities, an attempt to avoid a repeat of 2016.

June 2022

Coral Sul FLNG (2022)

The first floating liquefied natural gas plant in Area 4 began production, turning Mozambique into an LNG exporter. It was built to process gas from the Coral field and became the design basis for Coral Norte.

Then

Mozambique began exporting LNG and the project established an offshore operating base in Cabo Delgado.

Now

Coral Norte is described as an enhanced replica, reusing Coral Sul's design and operating experience to cut construction time and cost.

Why this matters now

Coral Norte's schedule and budget rest on the claim that copying Coral Sul reduces risk, which makes the first plant's performance the key benchmark.