World Bank Pledges $6 Billion to Support Mozambique’s Economic Recovery

The World Bank will provide Mozambique $6 billion in concessional financing over five years to support public investment, alongside efforts to attract $4 billion from private investors. The funding aims to stabilize finances and support recovery, amid debt challenges, fiscal deficits, and climate-related shocks.

The World Bank has announced that it plans to provide Mozambique with $6 billion in financing over the next five years, with the majority of the funds coming in the form of highly concessional loans and grants. This financial support is intended to back key public investment projects across the country, which is currently grappling with significant fiscal pressures. Mozambique’s public finances have been under strain for some time, and the International Monetary Fund has recently issued warnings about worsening debt dynamics, emphasizing the country’s vulnerability to rising debt levels and the need for sustainable financial management.
Fily Sissoko, the World Bank division director for Mozambique, explained that the institution already has a balance sheet of approximately $3 billion dedicated to the country. In addition to this, the Bank is aiming to mobilize another $3 billion from other sources, bringing the total to $6 billion. He described the financing as “very concessional,” meaning that the funds are provided on highly favorable terms, including low interest rates and long repayment periods, and that much of it consists of grants. These resources are intended to support Mozambique’s development strategy, strengthen public investment, and help the government meet its strategic goals in areas such as infrastructure, health, education, and economic development.
In parallel, there are ongoing efforts to attract an additional $4 billion from private sector investors. This private funding is expected to complement the World Bank’s financing, further expanding the resources available for development projects, boosting economic activity, and supporting initiatives aimed at sustainable growth. By combining concessional public financing with private sector investment, Mozambique hopes to create a more diversified and resilient funding base to support its long-term development objectives.
Mozambique’s Finance Minister, Carla Louveira, emphasized the importance of the partnership framework with the World Bank. She explained that it is designed to promote macro-fiscal consolidation, stabilize public finances, and support sustainable economic recovery. Louveira highlighted that these measures aim to address fiscal deficits, improve revenue management, and ensure that public investment is directed toward projects that deliver meaningful social and economic benefits for the country’s population.
The resumption of TotalEnergies’ major liquefied natural gas (LNG) project is seen as another positive factor for Mozambique’s economy. The project is expected to generate significant revenue, create employment opportunities, and attract further investment, offering hope for stronger economic growth in the coming years. Despite this optimism, the IMF has cautioned that the country faces several ongoing challenges, including delays in debt servicing and persistent fiscal deficits. These issues, if not addressed, could undermine financial stability and slow down the pace of recovery.
Mozambique is also highly exposed to recurrent climate shocks, including cyclones and floods, which have intensified due to climate change. These natural disasters not only damage infrastructure and disrupt communities but also place additional strain on public resources, complicating efforts to maintain fiscal stability and deliver essential services. As a result, the need for strategic financial support and investment is even more urgent, particularly to strengthen resilience, protect vulnerable populations, and ensure that development gains are sustained over time.
The combined efforts of concessional financing from the World Bank, targeted private sector investment, and proactive government policies are seen as crucial for Mozambique to navigate its current economic challenges. By addressing debt pressures, stabilizing public finances, and investing in key sectors, the country aims to create a foundation for long-term growth, improved living standards, and resilience against future economic and environmental shocks. The collaboration also underscores the importance of international support in helping developing nations manage complex financial and social challenges while pursuing sustainable development goals.