Foreign businesses are investing in Mozambique's energy sector
Italian energy company Eni has agreed to pay $400m (£256m) in capital gains tax to authorities in Mozambique.
Eni is among several foreign firms exploring for hydrocarbons in Mozambique, where large quantities of natural gas have already been found.
But the government has faced criticism over huge tax breaks it has granted foreign energy companies.
Eni said the tax payment relates to a deal signed earlier this year with the China National Petroleum Corporation.
Under the terms of the deal, the Chinese corporation will take a stake in some of Eni's African operations.
Many foreign companies have invested in Mozambique's oil and gas sector since the conclusion of a prolonged civil war that ended in 1992.
The World Bank said Mozambique's transition from a post-conflict country to one of Africa's "frontier economies" has made it a model for many countries in the continent and elsewhere.
Eni chief executive, Paolo Scaroni, also told Mozambique's President Armando Guebuza that his company will also help with the construction of a power plant in the north-eastern Cabo Delgado province.
Mozambique supplies electricity to a number of other countries including Malawi, South Africa and Zimbabwe.
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