Mozambique LNG Project Secures US$4.7 Billion Loan...

Mozambique LNG Project Secures US$4.7 Billion Loan from US bank

Zim Now Writer

The Mozambique LNG project has secured a significant step toward revival with a US$4.7 billion loan approved by the Export-Import Bank of the United States (U.S. EXIM). This decision follows a long pause in development due to insurgent attacks near the construction site in Cabo Delgado province.

The project, led by TotalEnergies, is now poised to resume operations, after a two-year delay, marking a major milestone in the development of Mozambique’s vast natural gas reserves.

The U.S. EXIM board’s approval of the loan underscores the strategic importance of the Mozambique LNG project in enhancing global LNG supplies and energy security for U.S. allies. The move aligns with former President Donald Trump’s energy policies, which aimed to boost U.S. energy dominance globally.

Originally valued at US$20 billion, the project taps into the Rovuma Basin, which holds one of the world’s largest natural gas reserves, totaling an estimated 65 trillion cubic feet (tcf) of gas. However, while the project has garnered significant international backing, its resumption remains contentious due to security risks, including insurgent violence in the region.

Despite the project’s potential to bolster global energy markets, the approval of this loan has sparked fierce opposition from NGOs, human rights groups, and environmental activists. They argue that the project is linked to human rights violations, including forced displacements and attacks on local communities.

Ayumi Fukakusa, Deputy Director at Friends of the Earth Japan, expressed concern over the lack of transparency in the financing, urging international financiers to reconsider their involvement in the project.

Collin Rees, U.S. Campaign Manager at Oil Change International, denounced the approval, calling it a “climate and human rights nightmare.” Rees emphasized that public funds should be used to support sustainable and ethical projects rather than fossil fuel ventures associated with severe environmental and social costs.

The project has gained support from some far-right governments, including those of Italy and the U.S., but it faces growing opposition from European and Asian financiers, who have expressed concerns about the human rights violations and environmental damage associated with the project.

For example, the Dutch government has initiated an independent inquiry into alleged abuses tied to Mozambique LNG, reflecting a broader international divide over the project’s future.

Lorette Philippot, Private Finance Campaigner at Friends of the Earth France, urged French banks to distance themselves from the project, highlighting the lack of accountability from TotalEnergies and its partners.