by Samantha James

Boom in coal industry

Mozambique's infrastructure will experience growth in the coming years

Infrastructure in Mozambique is set to increase in the next decade due to a boom in coal mining

The sudden boom in the coal mining industry is driving infrastructure development in Mozambique, with the transport and energy and power infrastructure sectors set to experience the greatest growth over the next decade.

New analysis from Frost & Sullivan's "African Infrastructure Tracker: Mozambique’s Infrastructure Sectors" finds that there are nearly 60 multimillion-dollar ongoing infrastructure projects in the country, of which 10 are multibillion-dollar projects. Transport, energy and power, telecommunications, water and, social infrastructure will see an investment of approximately $34 billion.

“Several coal mines are being developed in the Tete Province of Mozambique,” noted Frost & Sullivan’s Environmental and Building Technologies industry analyst, Sarah O’Carroll. “Improved logistics infrastructure for raw material exportation will be necessary to make these mines successful and competitive.”

The mining industry is energy-intensive. Currently, mines are expected to meet their own energy demands through the use of diesel generators. Mozambique, however, is already engaged in several capacity-building projects in the energy and power sector to meet projected increases in demand.

The transport sector will benefit from investment to the value of $22.41 billion over the next decade. Investments in the roads sector will see the reconstruction of a number of trunk roads that were destroyed during the civil war, as well as the development of the Nacala  and Maputo corridors.

Investments in the rail sector will be used to expand the rail network – currently a single railway corridor – to facilitate exports from Tete. Many ports are undergoing significant expansion projects so that the country’s export capacity will increase fivefold.

“The government’s reliance on donor funding is the single most significant challenge restraining infrastructure development in the country,” cautioned O’Carroll. “However, the private sector is currently supporting 65.6% of all infrastructure projects in Mozambique, thus stimulating infrastructure development in the country.”

Mining companies, in particular, account for 17.1% of all infrastructure investments, ensuring infrastructure is sufficient to support their coal exports.

“Companies that have been in the market for several years, which can demonstrate their ability to overcome challenges, as well as work within a specified budget and deliver projects timely, have the greatest advantage in winning tenders in Mozambique,” advised O’Carroll. “Here, it is not only price, but quality and service that are equally important.”

 African Infrastructure Tracker: Mozambique’s Infrastructure Sectors is part of the Environmental Growth Partnership Service programme, which also includes research in the following markets: Kenya's Infrastructure Sectors, Uganda's Infrastructure Sectors, Tanzania’s Infrastructure Sectors and Namibia’s Infrastructure Sectors.

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