UK (Parliament Politics Magazine) – UK withdraws $1.15bn loan to TotalEnergies Mozambique gas project over environmental, security, and human rights concerns.
As reported by The Guardian, Britain has withdrawn $1.15bn (£870m) funding from Mozambique’s gas project over climate risks and regional terror concerns.
What did Peter Kyle say about UK support for the Mozambique gas project?
Business Secretary Peter Kyle confirmed that the UK will withdraw its export finance from the Mozambique liquefied natural gas project, five years after campaigners slammed it for threatening human rights, security, and the environment.
The move comes as TotalEnergies, the French developer, plans to restart the troubled Mozambique LNG project, which has been on hold since an Islamist insurgency killed more than 800 people in a nearby town in 2021.
Mr Kyle confirmed on Monday that UK Export Finance had decided to end its involvement in the project after a comprehensive review of the scheme and the interests of UK taxpayers.
He said,
“Whilst these decisions are never easy, the government believes that UK financing of this project will not advance the interests of our country.”
The Business Secretary said officials had assessed the project and found its risks had increased since 2020.
The Department for Business added,
“The government remains committed to backing British exporters, including through support from UKEF, as we have set out in our Industrial and Trade Strategies. We also remain committed to our national partnership with Mozambique and building long-term respectful relationships with African countries to boost sustainable growth, tackle the climate crisis and address insecurity.”
How did the Mozambique LNG project spark controversy in the UK?
The UK signed off on a support package for Mozambique, following calls from the Environmental Audit Committee and Labour MPs to end government funding of overseas polluting projects over climate commitments.
According to UKef, the Mozambique project was expected to create more than 2,000 jobs in the UK, including opportunities for small businesses, while driving significant economic and social progress in the country. The project’s gas was expected to supply British homes under a 2019 agreement with Centrica, the UK-based owner of British Gas.
Green groups, including Friends of the Earth, urged a judicial review of government support for the Mozambique gas project and called for greater investment in renewable energy to build a sustainable economy.
The scheme has sparked regional terror concerns and faced allegations of human rights violations against local communities displaced during development.
How did activists react to the UK ending its backing for Mozambique LNG?
Antoine Bouhey of Reclaim Finance said the government’s decision shows ministers recognize that the project is deeply flawed and cannot be supported.
He said, “It has been blatantly clear for years that this project is a disaster for local communities and for the climate.”
Mr Bouhey urged top international banks Standard Chartered, Crédit Agricole, and Société Générale to pull their support for the scheme, adding they
“can no longer turn a blind eye to the problems and must immediately withdraw their support.”
Asad Rehman, CEO of Friends of the Earth, said,
“This Mozambique gas project is a huge carbon timebomb, linked to serious human rights abuses. It should never have been given UK taxpayer-funded support in the first place. We now urge other countries to follow suit and end their backing for this destructive project.”
He added,
“The UK should instead support countries like Mozambique, which are on the frontline of the climate crisis, by helping them adapt to its impacts and invest in their abundant clean energy resources to bring affordable energy to the 60% of the country locked into energy poverty.”
Where is the Mozambique LNG project located?
The Mozambique LNG project is a major natural gas development located in the northern part of the country, primarily in the Afungi Peninsula.
The project’s main onshore liquefaction facility is being developed on the Afungi Peninsula, which is in the Palma District of Cabo Delgado Province.
The natural gas processed at the facility comes from the Golfinho and Atum gas fields, located in the deep-water Rovuma Basin around 40 kilometers off the coast of Cabo Delgado.
Due to insurgent attacks in Cabo Delgado, the project was suspended in 2021. Recent reports indicate operator TotalEnergies has moved to restart the project.
