British government cites national interest as it halts financing for stalled LNG development amid security concerns and rising project costs….
The British government has announced it will no longer provide financial support to TotalEnergies for its multi-billion-dollar liquefied natural gas (LNG) project in northern Mozambique, which was previously halted following a deadly jihadist attack.
The decision means the UK will withhold up to $1.15 billion in loan financing originally committed to the project. The move follows TotalEnergies’ decision in October to lift the suspension that had been in place since 2021, when insurgents carried out an assault that left an estimated 800 people dead.
Business Secretary Peter Kyle said the government carefully reviewed the project before concluding that continued UK support would not advance the country’s strategic interests.
“Whilst these decisions are never easy, the government believes that UK financing of this project will not advance the interests of our country,” Kyle said in a statement.
The export credit agency UK Export Finance (UKEF) confirmed that it has formally halted its involvement, despite the LNG development once being considered beneficial to British economic interests.
TotalEnergies, which holds a 26.5 percent stake in the $20 billion gas project, had declared force majeure after the 2021 attack. The company recently sought about $4.5 billion in additional funds from the Mozambican government to cover cost overruns caused by the delays. It said it aims to restart production by 2029, pending approval of its revised budget.
The UK government stressed that it remains committed to supporting British exporters and maintaining its development partnership with Mozambique. Kyle added that London is focused on fostering long-term relationships in Africa to promote sustainable growth, climate action, and improved security.
TotalEnergies has faced sharp criticism from Mozambican and international civil society groups, who accuse the company of pressuring the government for “ultra-favourable” terms before resuming operations in Cabo Delgado, a region plagued by years of insurgency.
Alongside TotalEnergies, major energy companies including ENI and ExxonMobil are developing gas fields in the area. According to a 2024 Deloitte report, these projects could position Mozambique among the world’s top ten gas producers by 2040, potentially supplying 20 percent of Africa’s natural gas output.
However, environmental groups warn the developments could become major “climate bombs”, arguing that the benefits to local communities will remain limited in a country where more than 80 percent of the population lived below $3 a day in 2022, according to World Bank data.
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