LOCATION

The Country

SADCThe Way Forward

2008 Free Trade Area

2010 Customs Union

2015 Common Market

2018 Monetary Union

CPI - Investment Promotion Centre

CPI - Investment Promotion CentreMission

To identify potential financial and/or technological partners for joint ventures;

To identify and disseminate investment opportunities;

To promote programmes of assistance to the development of businesses, in particular national businesses.

Why Invest in Mozambique?

Centro de Promoção de Investimentos

Mozambique has stable economy and a privileged geographical position, coast-line and climate;

Country rich in natural resources (land, mining, hidro,gas etc.);

With good transport infrastructure ,Ports and “Development Corridors” serving the Hinterland;

Millions of idle arable land, available through legal concession arrangements for Agriculture investments; Bio fuels; and, other sustainable agro-industrial activities.

Maputo, Beira , Sena and Nacala regional transport/development corridors related business are excellent investment opportunity;

Development and operation of new/rehabilitated port facilities;

Why Invest in Mozambique?

Incremental Power Generation and Transmission Investments;

Telecom Investments ;

Water Supply Production and Transportation on BOT/BOOT/15 yr exploitation (up to $100 million);

Tourism Investments

Centro de Promoção de Investimentos

Why Invest in Mozambique?

COKE AND COAL ROUTECOKE AND COAL ROUTE

FRUIT ROUTEFRUIT ROUTE

Specific Incentives

Agriculture and Fisheries

Hotels and Tourism

Manufacturing and Assembling Industries

Creation of basic infrastructures

Rural commerce and industry

Science and technology parks

Large projects

Rapid Development Zones

Export Processing Zones

Special Economic Zones

RapidDevelopment

ZonesIbo

NacalaMoz. Island

Sofala

MOZAMBIQUE PROJECTS OPPORTUNITIES

SADC Transport Corridors

REGIONAL TRANSMISSION GRIDREGIONAL TRANSMISSION GRID

Dem Rep of CongoCongoGabon

Luanda

Windhoek

Lusaka

Harare

Lilongwe

Nairobi

Dar es Salaam

GaboronePretoria

Johannesburg

Cape Town

MaputoMbabane

KinshasaBrazzaville

Angola

Tanzania

Kenya

Mozambique

South Africa

Swaziland

Lesotho

Namibia

Zambia

BotswanaZimbabwe

Malawi

RwandaBurundi

H

H

H

H

H

H

H

H

H

H H

H

H

HH

H

PH

H

T

T

T

T

TT TT

TTTTT T

T

T

HH

H

TH

P

N

HH

H

T

Hydro stationPumped storage schemeThermal Station

P

Transmission network

Special Projects

Project Area of activityInvestment

(current US$)

Operations start in year

Cahora Bassa (HCB) Hydroelectric power) (1969)

Mozal 1 Aluminum smelter 1997

Mozal II Ditto 2001

Temane Gas (also Pande)

Natural gas (SASOL) 2002

Moma Heavy Sands Titanium mining 2003

ProCana Sugar cane to ethanol, Massingir

$500 M 2007

Corridor Sands Project

Titanium mining

PETROMOC pipeline Petroleum product pipeline to S.A.

> $500 M

Centro de Promoção de Investimentos

Special Projects

ProjectArea of activity Investment

(current US$)

Operations start in year:

COFAMOSA biofuels Sugar cane to ethanol $500 m

Petrobuzi Sugar cane to ethanol $550 m

Rio Lurio Sugar cane to ethanol, Cabo Delgado

N.A.

CVRD/Moatize Coal mining and export $1+ bCVRD/Moatize power Coal-fired power plant $2 b

including transmission

Riversdale Holdings Coal mining and coal-fired power plant

N.A.

Temane power Gas-fired electricity power N.A.Cahora Bassa North Hydroelectric power ???Mphanda Nkuwa Hydroelectric power $1.6 b

Transmission line for Mphanda Nkuwa

Transmission line to S. Africa $2.3 b

MOZAL III Aluminium smelter N.A.Centro de Promoção de Investimentos

Clusters -

Ports Railways Essential

Oils

Forestry and Pulp

Sea Products

TourismTourism GasGas CottonCotton Aquaculture

CoalCoal SugarSugarTantaliteTantalite Tropical

fruits

Aluminium TitaniumTitanium FlowersFlowers

CETA Construction

MBO in 1999 -annual sales 10Mi USD.MBO w/ a venture capital fund (NORFUND + Aureos Capital). 250 shareholders, 15 controls 70%

2009 -CETA annual sales 55 Mi USD. Main competitors, Chinese contractors

According to KPMG, CETA is the largest employer in Mozambique (3,000 workers, most as casual labour).

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CETA Construction

Recent contracts show impact of Coal projects:•1,000 low cost houses for Brazilian Mining House VALE on Moatize Coal project•Access Road and housing for Riversdale, a JV Australian - Indian Mining Houses, on Benga Coal project

•Maputo housing market is still growing

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Agro Processing

CETA invested in MAP, an agro business company, with main focus in cashew nut processing, mango and banana;

MAP is now pursuing a major project:2,000 Ha of banana with off-take agreement with a multinational: Market location, counter season, Land and Water are main drivers. Chile of SADC?

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Challenges X Opportunities

Delay in payment in government portion (20-30% of WB and ADB) of contracts is a major problem in construction industry

XHave private investors contracts or export driven products. Although late in payment gov’t had honoured all debts, so banks are willing to lend based on this debt.

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Challenges X Opportunities

High cost of financing in local currency (Metical)

X Finance in foreign currency according to your currency revenues stream (no restriction from Central Bank if lender is a foreign bank) . Local banks can finance in USD only for exporters

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Challenges X Opportunities

Lack of vocational training and projects must take this factor into account

XHave in-house training schemes in partnership with public institutions. Mozambican labour are very keen to learn

e.g. on going 3,000 Ha of Banana project major constrain is training of local labour.

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Challenges X Opportunities

Lack of directors with corporate governance experience in some specific trade areas:eg CETA construction in last 10 years had one South African non-executive board member, despite the fact that he cannot speak PortugueseXPlan in advance composition of Board of Directors, surveying local market

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Challenges X Opportunities

Logistics throughout the country must be well planned in advance. Transport or handling costs can be high in Southern Africa, compared to other emerging markets XPositive factor is proximity of South Africa (Maputo is 100km from RSA border), as a supplier of goods and services. Volume can bring transport costs down

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Challenges X Opportunities

Hiv-Aids and Malaria can impact on productivity, and the most affected are the mobile workforce

X

Proactive role from top management reduce drastically the effects

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Challenges X Opportunities

Government vs Private sector promotion and dialogue

X

There is a regular dialogue between Confederations and Gov’t institutions but more can be achieved in future if private sector get more capacity

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Challenges X Opportunities

Closing remarks: market economy had really re-started in Mozambique after 1994, with peace agreement and general elections. In 16 years one can feel that a new generation of entrepreneurs is grooming and country is prepared for new ventures despite all the challenges mentioned.

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Mozambique Investment Promotion Centre

www.cpi.co.mz