The U.S. Export-Import Bank has approved a $5 billion loan to TotalEnergies for a delayed LNG project in Mozambique, which had been stalled due to violence in the Cabo Delgado region. The approval is vital for restarting construction, with accompanying support anticipated from UK and Dutch agencies. However, environmental groups express concerns over the project’s impacts.
The U.S. Export-Import Bank has authorized a significant $5 billion loan for a long-stalled liquefied natural gas (LNG) project in Mozambique, crucial for TotalEnergies’ efforts to revive the initiative. Previously, the Bank had approved a $4.7 billion loan during the Trump Administration, which required renewed approval after the project was suspended in 2021 due to escalating violence in the Cabo Delgado region.
TotalEnergies CEO Patrick Pouyanne anticipated the approval of U.S. financing in the coming weeks, with expectations for other credit agencies from the UK and the Netherlands to follow. The project has been under a force majeure since 2021, awaiting confirmations of loan re-approvals from various international entities.
Mozambique LNG is strategically positioned to elevate Mozambique as a prominent LNG producer, given TotalEnergies’ 26.5% share. However, operations were disrupted by an insurgency linked to Islamic State-affiliated militants. A partner company, Mitsui, reported improvements in security, indicating readiness to recommence construction after renegotiations with contractors.
Environmental advocates have raised concerns regarding the project’s safety and sustainability. Daniel Ribiero from Friends of the Earth Mozambique emphasized that the broader implications, such as human rights abuses and environmental risks, ought to deter responsible investors from participating in the venture.
The recent approval of a $5 billion loan by the U.S. Export-Import Bank marks a pivotal moment for the Mozambique LNG project, allowing TotalEnergies to progress towards reviving the initiative after significant delays. Despite security improvements, concerns regarding human rights and environmental impacts remain critical considerations for stakeholders and investors in the region.
Original Source: www.tradingview.com
