The U.S. Export-Import Bank has approved a nearly $5 billion loan for TotalEnergies’ Mozambique LNG project, crucial for overcoming previous construction delays due to unrest in Cabo Delgado. CEO Patrick Pouyanne anticipates further financing approvals, with Mozambique’s Energy Minister expecting UK and Dutch support. However, environmental groups express concern over human rights and environmental risks associated with the project.
The U.S. Export-Import Bank has granted a nearly $5 billion loan to TotalEnergies for a liquefied natural gas (LNG) project in Mozambique, essential for restarting the long-stalled initiative. Initially, the bank approved a $4.7 billion loan during the Trump administration; however, following construction freezes due to violence in Cabo Delgado, re-approval became necessary before any funds could be disbursed.
TotalEnergies’ CEO, Patrick Pouyanne, indicated last month his expectation for U.S. financing approval to arrive shortly, with other credit agencies expected to follow suit thereafter. The company has been awaiting re-approvals from several countries, including the United States, the United Kingdom, and the Netherlands, prior to lifting the force majeure declared since 2021.
Mozambique’s Minister of Energy, Estevao Pale, expressed optimism regarding the re-confirmation of support from the UK and Dutch agencies. TotalEnergies holds a 26.5% operating stake in the Mozambique LNG project, which aims to position Mozambique as a key LNG producer. However, the project faced significant delays due to an insurgency by militants in the region.
Security conditions in Cabo Delgado have reportedly improved, with construction partner Mitsui indicating plans for final preparations to resume. Nevertheless, environmental advocates argue that the project’s inherent security risks should disqualify it from receiving support. Daniel Ribiero from Friends of the Earth Mozambique emphasized the serious concerns regarding human rights, armed conflict, and environmental impacts related to the project.
The U.S. Export-Import Bank’s approval of a nearly $5 billion loan to TotalEnergies represents a significant development in restarting the Mozambique LNG project. While security conditions may have improved, concerns persist among environmental groups regarding the project’s broader implications on human rights and the environment. The successful resumption of this project aims to enhance Mozambique’s status as a major LNG producer, yet ongoing scrutiny remains crucial.
Original Source: www.tradingview.com
