Mozambique has given the green light to a $2 billion port expansion project that will be led by Dubai-based global ports operator DP World and South Africa’s Grindrod Ltd. The project aims to increase the capacity and efficiency of the port of Maputo, the country’s largest and most strategic port, and enhance its role as a regional trade hub.
The port expansion project is part of a 25-year concession agreement that was approved by the Mozambican Council of Ministers on Tuesday. The agreement extends the current concession, which was due to expire in 2033, until 2058. It also includes investments of nearly $1.1 billion by 2033 and another $900 million by 2058.
According to the agreement, the port’s capacity will increase from 37 million tons per year to 54 million tons per year by 2058. This will include expanding the coal terminal in Matola, adjacent to Maputo, from 7.5 million tons to 18 million tons per year, and increasing the container terminal capacity from 250,000 to one million units per year.
The port expansion project is expected to create more than 10,000 direct and indirect jobs, as well as generate significant economic and social benefits for Mozambique and its neighboring countries. The port of Maputo serves as a gateway for the landlocked countries of Botswana, Zimbabwe, Zambia, Malawi, and Eswatini, as well as the provinces of South Africa’s Mpumalanga and Gauteng.
The port of Maputo has been growing rapidly in recent years, thanks to its strategic location, deep-water access, and modern infrastructure. In 2023, the port handled a record 22.9 million tons of cargo, up 13% from 2022, despite the challenges posed by the Covid-19 pandemic. The port also attracted new shipping lines and routes, connecting Mozambique to global markets.
The port expansion project is in line with Mozambique’s vision to become a regional logistics hub and a key player in the global supply chain. The project also supports the country’s efforts to diversify its economy, which has been heavily dependent on the extractive sector, especially natural gas. Mozambique is home to some of the world’s largest offshore gas fields, which are expected to start production in 2025.
The port expansion project also aligns with DP World’s strategy to invest in emerging markets and develop integrated logistics solutions. DP World is one of the world’s leading ports and logistics operators, with a portfolio of more than 150 operations in over 50 countries. The company has been operating in Mozambique since 2003 when it acquired a stake in the Maputo Port Development Company (MPDC), the consortium that holds the concession for the port of Maputo.
Grindrod, a South African company that provides freight and financial services, is another partner in the MPDC consortium, along with Mozambique’s state-owned railway company, CFM. Grindrod has been involved in the port of Maputo since 2008 when it invested in the rehabilitation and expansion of the coal terminal. Grindrod also operates rail and road services that connect the port to the hinterland markets.
The port expansion project is a testament to the strong partnership and collaboration between the public and private sectors in Mozambique, as well as the confidence and commitment of international investors. The project will boost the competitiveness and resilience of the Mozambican economy, as well as foster regional integration and cooperation. The project will also contribute to the sustainable development goals of reducing poverty, improving infrastructure, and promoting inclusive growth.
Source: Bloomberg
