The British government has decided to withdraw its $1.15 billion backing for the TotalEnergies-led Mozambique Liquefied Natural Gas (LNG) project, it said this Monday.
Britain had promised financial support for the $20 billion project via United Kingdom Export Finance in 2020, shortly before it pledged to stop providing direct government support for overseas fossil fuel projects.
The development had been slated to make Mozambique a major LNG exporter to Europe and Asia, but was halted in 2021 due to an Islamist insurgency. Jihadist attacks are back on the rise in Mozambique, with Total bringing in workers and equipment by air and sea for security reasons.
Total lifted force majeure on the project in November, but made restarting construction conditional on the Mozambican government’s approval of a new budget, which the president said he may dispute.
“In preparation to restart the project, UKEF was presented with a proposal to amend the financing terms it had agreed originally,” British business minister Peter Kyle said in a statement.
“My officials have evaluated the risks around the project, and it is the view of His Majesty’s Government that these risks have increased since 2020.”
“This view is based on a comprehensive assessment of the project and the interests of UK taxpayers, which are best served by ending our participation in the project at this time.”
TotalEnergies declined to comment.
–SABC–
