The U.S. Export-Import Bank has approved a nearly $5 billion loan for the long-delayed Mozambique LNG project, marking a significant step forward in the resumption of the $20 billion development led by French oil giant TotalEnergies.
Originally approved during President Donald Trump’s administration, the Export-Import Bank’s $4.7 billion loan was halted in 2021 after construction of the project was suspended due to violent unrest in the northern Cabo Delgado region of Mozambique. The project, a major natural gas export initiative, could not proceed without re-approval of the financing, which has now been granted.
TotalEnergies CEO Patrick Pouyanne expressed optimism last month, stating that he expected U.S. financing approval soon, with additional funding from other credit agencies to follow in the coming months. The company had been awaiting loan re-approvals from the United States, the United Kingdom, and the Netherlands before lifting a force majeure on the project, which has been in place since 2021.
Estevao Pale, Mozambique’s Minister for Energy, shared similar expectations, anticipating that the U.K. and the Netherlands would reaffirm their support for the project.
Mozambique LNG, in which TotalEnergies holds a 26.5% operating stake, was initially set to position the southern African country as a key player in the global liquefied natural gas (LNG) market. However, the project faced significant setbacks when an insurgency led by Islamic State-affiliated militants swept through the region, halting progress.
Security conditions have since improved, with project partner Mitsui announcing in December that final preparations were underway to resume construction, following renegotiations with contractors.
Despite these advancements, environmental groups have raised concerns over the project’s risks. Daniel Ribiero, technical coordinator for Friends of the Earth Mozambique, argued that the ongoing security risks, human rights violations, and potential environmental and economic impacts should have deterred investors from supporting the project.
“The human rights violations, armed conflict, environmental impacts, and risky economic projections of the Mozambique LNG project should have kept most sensible investors away,” Ribiero said.
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