The Japanese government has approved a $44 million loan to finance a proposed gas-fired power plant in the Mozambican capital Maputo that will assist the southern African nation keep up with electricity demand.
According to a statement issued by the Mozambican government on Sunday, the agreement was formalised by Foreign Affairs and Cooperation Minister José Pacheco and Japanese ambassador Toshio Ikeda.
When completed in 2020, the power station is expected to add 110 megawatts (MW) to the national grid.
Mozambique has seen a spike in foreign investment since it hit on huge gas reserves, but power shortages threaten the development of industry and economic growth.
Power demand, which is about 800MW at peak times, already outstrips existing supply of around 700MW in the former Portuguese colony whose economy is expected to grow by 14 percent this year.
The statement said the Japanese government also pledged to continue supporting Mozambique in the areas of human resources training, energy, education, health and agriculture.
CM/jn/APA