The board of the U.S. Export-Import Bank approved a nearly $5 billion loan for a long-delayed LNG project in Mozambique, clearing a key hurdle to restarting the project under development by French oil major TotalEnergies.
The Export-Import Bank had previously agreed a $4.7 billion loan for the $20 billion project under President Donald Trump's first administration, but it needed to be re-approved after construction on the project was frozen in 2021 due to violent unrest in the nearby northern Cabo Delgado region — before any disbursements were made.
TotalEnergies CEO Patrick Pouyanne said last month that he expected financing from the United States to be approved in coming weeks, with other credit agencies to follow in the months after.
The company had been waiting for loan re-approvals from the United States, UK and Dutch export credit agencies before lifting a force majeure on the project that has been in place since 2021.
Estevao Pale, Mozambique's minister for energy, told the FT that he also expects the UK and Netherlands to reconfirm their support.
Mozambique LNG, in which TotalEnergies holds a 26.5% operating stake, was slated to make the southern African nation a major LNG producer, but the project ground to a halt when an insurgency led by Islamic State-linked militants swept the region.
Security there has since improved, with partner company Mitsui saying in December that final preparations were underway to resume construction after renegotiation with contractors.
Environmental groups said the security risks tied to the project should have been enough to deny support for 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," said Daniel Ribiero, technical coordinator of Friends of the Earth Mozambique.
(Reuters - Reporting by Chandni Shah in Bengaluru and Dominique Patton in Paris; additional reporting by Valerie Volcovici in Washington; Editing by Tasim Zahid and Leslie Adler)