MAPUTO - The World Bank has approved a grant of $300 million to Mozambique as part of efforts to help revitalise the southern African nation's economy, the multilateral lender said in a statement.

"This operation supports the country's recovery from COVID-19 and structural reforms to foster sustained growth, while providing much-needed financing to alleviate recent fiscal constraints," Idah Pswarayi-Riddihough, the bank's Mozambique director, said in the statement.

The grant comes after the International Monetary Fund approved a $456 million programme in May, which was Mozambique's first since the IMF suspended support six years ago in the wake of a high-profile debt scandal.

The World Bank money will be used to support budgetary institutions, improve transparency and the business environment, and address Mozambique's commitments on climate change.

(Reporting by Manuel Mucari; Writing by Bhargav Acharya; Editing by Alexander Winning and Jonathan Oatis)