Wedoany.com Report-Oct. 28, Mozambique's only euro-denominated bond saw gains on Monday following TotalEnergies (TTEF.PA)'s announcement that it has lifted force majeure on its large-scale liquefied natural gas project. This step clears the path for resuming construction after extended interruptions.

The TotalEnergies logo is pictured at the Hyvolution exhibition in Paris, France, January 28, 2025.

The dollar-denominated bonds due in 2031 rose more than 2 cents, reaching bids of 89.38 cents on the dollar by 1112 GMT. This movement lowered the yield to 12.53%, marking its lowest point in two weeks.

The removal of force majeure signals progress for the initiative, which holds potential to reshape Mozambique's economy through export earnings. The facility, designed for 13 million metric tons annually, is projected to begin operations in 2029.

Situated in Cabo Delgado province, the plant stands at about 40% completion. Security issues in the area continue, even with assistance from Rwanda-supported forces.

In a research note, Morgan Stanley analysts Neville Mandimika and Simon Waever highlighted the contrast between Mozambique's immediate challenges and future opportunities. They pointed to funding limitations and lingering effects from post-election disturbances last year.

"Yet, if the country can maintain stability and implement prudent reforms, the LNG boom expected in 2029/2030 could create fiscal space, improve the balance of payments, and support broad-based growth," they added.

The project's advancement depends on sustained operational continuity. Resuming work addresses prior setbacks from external factors, enabling focus on remaining construction phases.

TotalEnergies' decision reflects confidence in managing site conditions. Coordination with local and international partners supports timeline adherence.

Bond market response indicates investor optimism about revenue prospects. Improved yields suggest reduced perceived risks tied to project viability.

Cabo Delgado's development could generate employment and infrastructure benefits. Gas exports would diversify income sources beyond traditional sectors.

Analysts emphasize the role of governance in unlocking these gains. Stability fosters investor trust and facilitates access to capital markets.

The 2029 startup aligns with global demand for cleaner energy supplies. Mozambique's reserves position it as a key supplier in Africa.

Force majeure lifting involves contractual adjustments to account for past delays. Stakeholders now prioritize efficiency in execution.

Economic transformation requires complementary policies, such as skill-building programs. LNG proceeds could fund public services and debt management.

Market dynamics favor projects with firm commitments. TotalEnergies' involvement provides technical expertise and financial backing.

Ongoing security measures aim to protect personnel and assets. Collaborative efforts enhance regional resilience.

The bond rally underscores linkage between project milestones and fiscal health. Positive updates bolster credit profiles for sovereign issuers.

As construction restarts, monitoring progress will gauge adherence to schedules. Successful completion promises long-term prosperity.

This development highlights resource-driven growth potential. Balanced approaches to challenges can yield substantial returns for the nation.