The UK administration has pulled a controversial $1.15 billion loan supporting a massive liquefied natural gas development in the African nation of Mozambique, citing mounting concerns that the venture exacerbates the climate emergency and terrorist attacks in the region.
Official Announcement and Rationale
Business Secretary Peter Kyle announced that the UK would terminate its financial support for the Mozambique LNG project, marking five years after the deal provoked strong criticism from campaigners over its impact on local communities, safety, and the planet.
“Although these decisions are never easy, the government holds the view that UK financing of this scheme will not serve the interests of our nation,” stated Kyle.
The move was revealed as the scheme's developer, French oil giant TotalEnergies, plans to revive the delayed operation, which has been on hold since a deadly militant attack on a nearby community in 2021 caused over 800 of deaths.
Background and Escalating Risks
The loan guarantee was first agreed in 2020. Authorities explained they had reviewed the potential problems linked to the venture and determined they had escalated substantially since that point.
Initially, the UK's export credit agency had argued the project would support thousands of UK employment opportunities and could be “game-changing for Mozambique's financial and social progress.”
However, green organisations have maintained that the African nation should be supported to channel resources more aggressively in renewable energy to establish a viable green economy.
Criticism and Appeals for Wider Action
The initiative became a focal point for insurgency in the area and was also accused of violating the rights of residents who were displaced when construction activities began.
“It has been obvious for years that this scheme is a catastrophe for local communities and for the environment,” said one campaigner from a ethical investment organisation. He pressed major financial institutions supporting the venture to withdraw their support, saying they “can no longer overlook the concerns.”
Another leading climate advocate said: “This LNG scheme is a enormous climate liability, connected to grave violations. It should never have been given UK taxpayer-funded backing in the first place.”
He further urged that the UK should instead help nations like Mozambique by helping them to adapt to the impacts of the climate crisis and invest in their plentiful clean energy resources.
TotalEnergies has been contacted for a statement.
