Standard Bank is taking a cautious approach to projects in Mozambique due to a recent sovereign debt crisis but still believes in the potential of the power sector, Rentia van Tonder, the bank’s head of renewable energy, power and infrastructure, said on Tuesday.
Mozambique missed a loan repayment deadline in May, plunging one of the world’s poorest countries into a debt crisis that has hit the economy and currency.
“At the moment we are all cautious when we do new projects in Mozambique,” van Tonder told Reuters on the sidelines of an African oil conference.
“We do have sovereign limits and certain guidelines we look at and our country risk team is currently reviewing our approach to Mozambique.”
Van Tonder said that while there was a pause on its projects, it still saw “massive potential” in the southern African nation, where new gas finds have seen foreign investors flocking to its under-developed shores.
Standard Bank, which was considering coal projects as well as an expansion to the Cahora Bassa hydropower scheme in Mozambique, was the lead arranger on the 100 megawatt Gigawatt independent power producer project in the country.
Swiss and British authorities are investigating Credit Suisse over loans it made to Mozambique.