Italian energy giant ENI which has a $7 billion coral floating liquefied natural gas project in Mozambique which Italian President Sergio Matterella visited before coming to Zambia intends to use the Luangwa valley under the Luangwa Community Forest Project – LCFP of Zambia without announcing any significant compensation to generate carbon offset credits needed for the project to pass global and EU emissions net zero requirements.
The Italian Energy company which has launched a multi billion (estimated at $7 billion by Bloomberg) project in Mozambique needs the Zambian based LCFP to successfully proceed and justify the carbon emissions that are expected to be generated by its new gas project.
The question however is whether the Zambian government has properly negotiated to get the best payout of significant economic value relative to what ENI will make from the gas emissions as well as as the over 1 million hectares that will be dedicated to forest conservation in lieu of potential future development by local Zambians who currently inhabit the vast area.
According to ENI, the Luangwa community Forests Project- LCFP covers about 1 million hectares, involves more than 170,000 local people in the affected communities, and is key to the energy company’s goal to achieve a zero net upstream emissions by 2030. This target includes the its Mozambique project.
ENI in its official report seen by the Zambian Business Times – ZBT confirmed that the Luangwa Valley project is key to not only achieving the minimization of direct Carbon dioxide (CO2) emissions, but also implementing projects to compensate for residual emissions from its multi billion dollar projects.
The Zambian government and Ministry of Green economy have been engaged to reveal how much the Zambian government will make in terms of revenues from this project. Ideally, ENI should be paying funds into the Zambian treasury for the carbon credits they are purchasing from Zambia’s Luangwa Valley.
A critical look at an investment of $7 billion and annual revenues expected from the gas that will be harvested in Mozambique, Zambia should be able to negotiate and get out some significant value as its negotiating play should take into consideration the risk/return that is commensurate with the international prices for both the gas to be extracted annually as well as carbon credits to be obtained from Luangwa valley.
