An agreement has been signed between Japan and Mozambique, which will see a further Japanese loan of $280 million made available to partially fund phase 2 of the expansion of the port of Nacala.

In 2012, Japan made available $30 million, followed by $70 million in 2013, both for the same project. The combined $380 million loan is the largest ever made available by Japan as part of its development programme. Repayment will be over 30 years at an annual interest rate of 0.01%, including a ten-year grace period.

Phase 1 construction began in March 2013 and phase 2 in May 2015. Work has involved dredging of the North quay and the preparation and paving of the terminal area. Once fully operational, these areas will increase capacity from 2mt (million tonnes) per annum to 5.5mt by 2020.