As Mozambique’s projects advance, insurance comes to the fore

Mozambique

High-profile energy projects are gathering momentum in Mozambique, bringing attention to the need for robust insurance markets capable of providing coverage for large-scale capital investments. Henri Mittermayer, CEO of Hollard Mozambique, interviewed for The Energy Year Mozambique 2024 report, provided some insights into the matter.

It has been a busy start to 2025 in Mozambique. XRG, ADNOC’s USD 80-billion energy investment arm, has taken a 10% stake in the Area 4 concession in the gas-rich Rovuma Basin, and the government recently gave the go-ahead for the country’s second floating LNG project. The US Export-Import Bank has approved a direct loan of up to USD 4.7 billion for the Mozambique LNG project in Cabo Delgado province, which had been on hold since TotalEnergies, the project’s operator, declared force majeure on the project in 2021 following violent unrest in the province.

The Energy Year Mozambique 2025 highlighted the role that these and other projects are playing in shaping the country’s energy future. Importantly, the pace at which projects evolve and the development contingencies they face call attention to the need for robust insurance markets to support them.

As Henri Mittermayer, CEO of Hollard Mozambique, noted, “Insurance supports economic growth by promoting risk management, facilitating investments and providing social protection.” In Mozambique’s unique risk environment, these functions “collectively stabilise and propel the economy, [which is] essential to the development of emerging markets.”

Read the full interview with Henri Mittermayer, as featured in The Energy Year Mozambique 2024, here. 

Mozambique’s nascent insurance markets are still insufficiently capitalised to effectively cover the massive investments that are being made as the country seeks to extract value from its large endowments of energy and mineral resources. In this context, access to reinsurance on international markets becomes indispensable as a mechanism to allow domestic companies to participate as underwriters in the country’s key development projects and as a source of assurance for international investors.

“While reinsurance may involve currency outflows, it is also vital for ensuring adequate capital coverage for high-value assets,” Mittermayer added. “Mozambican insurers, with their emerging balance sheets, require access to A-rated international reinsurance capital to cover large energy projects and infrastructure.”

With significant investments still on the horizon in Mozambique’s hydrocarbons and mining sectors, and large-scale infrastructure projects under way to modernise the country’s power grid and interconnection with neighbouring countries and the South Africa Power Pool, the participation of international and domestic investors, and multinational development finance organisations is bound to increase. “This is why,” Mittermayer concluded, “Hollard advocates for legislative changes that would link reinsurance more closely with local capabilities.”

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