African corporate and investment bank RMB has announced that a liquefied natural gas (LNG) project in Mozambique is expected to receive $15 billion of financing commitments at a signing scheduled for June 2020.

This announcement goes against the current challenges in the financial markets and a severe pullback in investment in the oil and gas sector in sub-Saharan Africa because of coronavirus.

The Mozambique LNG project will be led by multinational French oil and gas company Total SA and is expected to generate upwards of $40 billion in revenue for the government over its lifespan.

Jonathan Ross, Head of Oil and Gas Coverage at RMB, which is part of a consortium of banks currently providing commitments to financing the project, said: “It will be a remarkable achievement in the circumstances. The backdrop could not have been worse for Total and partners to raise huge volumes of long tenor funding – the economic fallout of COVID-19 has put enormous pressure on banks’ funding and capital and has triggered an oil price crash.”

Ross noted in a company statement that many projects were now delayed, and capital expenditure deferred as companies scrutinise costs in these challenging times.

“It is particularly encouraging to see rare progress for such a large and important project in what is a primary revenue-generating industry in Africa.”

He commended Mozambique LNG and Total SA for continuing to invest in the project along the original timeline.

For RMB, the deal will follow other financing commitments in the oil and gas sector in Mozambique. The bank was a co-funder and added to initial commitments for the Coral South floating liquefied natural gas (FLNG) project located offshore Mozambique, the first FLNG project in Africa.

“Supporting gas developments in Mozambique and the potentially transformational impact on Mozambique and the region remain of key strategic importance to RMB and the FirstRand Group”.

“In addition to these projects providing a secure source of energy supply in the region, they will also provide a boost to the economy and provide employment. RMB is proud to play a role in these projects,” Ross said.

He added that RMB has also helped support SA procurement to the gas developments in Mozambique. SA will be a key source of goods and services for the Projects, as well as a potential destination for some of the gas produced.

“These projects are also in line with FirstRand’s fossil fuels policy which has seen FirstRand moving its financing portfolio more towards natural gas, as a key transition fuel for the shift to lower carbon global energy supply.”