Mozambique to set up independent fund for projects

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Mozambique‘s government plans to set up a sovereign investment fund where taxes paid on sales of the country’s minerals will be used to finance development projects, state-run AIM news agency said on Monday quoting the Finance Minister.

Minister of Economy and Finance Adriano Maleiane said the new fund would have capital gains taxes paid on the sales of shares in the country’s mineral resources as the main source of funding.

AIM reported that the first money to go into the fund would likely be the $350 million in capital gains tax to be paid on the sale by Italian energy company ENI to the US oil and gas giant ExxonMobil.

In June ENI signed an $8 billion deal with government to develop a gas field off the coast of Mozambique, the first of a series of projects that could transform the poor African nation into a major energy supplier to Asia.

The Coral South, field operated by ENI, contains about 450billion cubic metres, or 16 trillion cubic feet (tcf) of gas.

Exxon Mobil Corp XOM.N agreed this year to pay Eni $2.8billion for a 25% stake in Coral South.

AIM reported Maleiane saying the fund would be managed by an autonomous institution, which is likely to be the National Investment Bank (BNI).

Maputo has been struggling to shake-off an international scandal after the discovery of hidden loans worth $2 billon to state companies led the International Monetary Fund and Western donors to halt support for Mozambique, triggering the collapse of its currency and leading to a debt default.