Major International Gas Project in Mozambique Loses Key Financial Backing

The United Kingdom has withdrawn its financial support for a major liquefied natural gas (LNG) project in Mozambique, dealing a significant blow to one of Africa's largest energy developments. The move has prompted the project's lead operator, French energy giant TotalEnergies, to exit a related financial guarantee from the Netherlands [16978].

The UK government's export credit agency, UK Export Finance, confirmed the cancellation of a $1.15 billion loan guarantee following a review of the project's viability [16160]. Officials cited the "significant risk" posed by an ongoing jihadist insurgency in the region where the project is located [16978]. This security crisis had previously forced TotalEnergies to suspend operations in 2021 [16160].

In response to the UK's decision, TotalEnergies opted out of a separate Dutch guarantee that would have covered a bank loan for the venture [16978]. The withdrawal of this crucial political and financial support from two European nations represents a major setback for the multi-billion dollar Mozambique LNG project [16978].

The development has faced severe challenges for years, including regional security problems, rising costs, and legal proceedings [16696][16160]. It has also drawn criticism from climate activists who argue it exacerbates the global climate crisis by expanding fossil fuel use [16865].

While seven other international export credit agencies remain part of the $14.9 billion financing package, the future of the venture is now uncertain [16696]. TotalEnergies has not announced a timeline for restarting work, and the project's viability is under increased pressure following the loss of British and Dutch backing [16160][16978].