On April 14, 2011, MIGA issued a guarantee covering an investment by Sojitz Corporation of Japan in Sojitz Maputo Cellulose Limitada in Mozambique (SOMACEL). Two additional guarantees were issued on June 15, 2011. The total coverage is for $9.1 million for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.
The project consists of the development of a greenfield wood-chipping operation. The facility will be located on the territory of the Maputo port and the raw material will be sourced from eucalyptus plantations in the northeast region of South Africa and from the Northern region of Swaziland. SOMACEL is expected to process and export wood chips. The output will be sold to a paper manufacturer in Japan.
The project is expected to generate local jobs and annual tax revenues for the government of Mozambique. This project is aligned with the third pillar of Mozambique’s development strategy which includes job creation and integrating the country into the international economy.
The project is also aligned with MIGA’s operational priority to support investments into countries eligible for concessional lending from the International Development Association. The project was underwritten through MIGA’s Small Investment Program.
