The US Export-Import Bank has sanctioned a $5 billion (€4.61 billion) loan to support the Mozambique LNG project spearheaded by TotalEnergies, marking a step towards resuming the $20 billion venture.
This decision comes after a commitment of $4.7 billion during President Donald Trump’s previous tenure, which was re-evaluated after construction was suspended in 2021 amidst security concerns and violent disruptions near the project site in the Cabo Delgado province of Mozambique.
TotalEnergies CEO, Patrick Pouyanne, anticipated this positive outcome from the US, expressing last month that further endorsements from other credit agencies were expected to follow.
The project, which has been on hold since 2021 due to a force majeure, is also awaiting reapproval of loans from the UK and Dutch export credit agencies.
In a statement to the Financial Times, Mozambique’s Minister for Energy, Estevao Pale, expressed his confidence in the UK and Netherlands reaffirming their support.
He said: “We are deeply grateful for President Trump and the American people’s support for this important LNG project.”
The Mozambique LNG project started in 2010 with the discovery of a large natural gas reserve off Mozambique’s northern coast.
The project is estimated to hold approximately 65 trillion cubic feet (tcf) of recoverable natural gas and involves the construction of two liquefaction units with a capacity of 13 million tonnes per annum (mtpa), with prospects for expansion to 43mtpa.
However, the project’s progress was halted by an insurgency linked to the Islamic State, which caused security concerns and halted construction.
Improved security conditions have been reported, with Mitsui, a partner company, indicating that final preparations to recommence construction are in progress after renegotiations with contractors.
Despite these developments, civil society groups have argued that the security risks and environmental impact associated with the project should have warranted a denial of support.
Friends of the Earth Mozambique technical coordinator, Daniel Ribiero, said: “The human rights violations, armed conflict, environmental impacts and risky economic projections of the Mozambique LNG project should have kept most sensible investors away.”
Kate DeAngelis, economic policy deputy director at Friends of the Earth US, described the decision as “the pinnacle of government waste and an egregious abuse of taxpayer dollars”.
Since taking office in January, the Trump administration has cancelled more than 80% of US international aid programmes – including dozens of projects in Mozambique – claiming they did not serve the country’s national interests.
“Clearly, the only aid Trump supports is foreign aid for billionaires and foreign gas companies,” DeAngelis added.
Oil Change International described the development as “a climate and human rights nightmare”.
Oil Change International U.S. Campaign Manager, Collin Rees, said: “Mozambique LNG is a climate and human rights nightmare. Its total emissions could exceed those released by the entire European Union each year, and a Mozambican army unit operating out of the project site allegedly committed systematic atrocities, including sexual violence, torture, and the murder or disappearance of at least 97 people.
“By approving this loan for TotalEnergies’ deadly project, the Trump administration is committing billions in taxpayer funds to a fossil fuel project linked to severe human rights violations, while simultaneously cutting federal jobs and essential public services for working families. Public money should support a healthy society and a sustainable future – not handouts for corporate polluters and human rights abusers.
“But the UK still has the option to take a different path. Keir Starmer faces a clear choice: join with Trump and other far-right governments in providing taxpayer backing for this disastrous project – already linked to hundreds of tragic deaths, including a British citizen – or show courage and break with the previous UK Government’s foolish decision to support this nightmare.”