UK Administration Withdraws Major Financing for Mozambique LNG Initiative Following Environmental and Security Worries
The UK government has withdrawn a controversial $1.15 bn loan supporting a large-scale liquefied natural gas project in Mozambique, citing increasing concerns that the initiative contributes to the climate emergency and insurgent attacks in the region.
Official Decision and Reasoning
Business Secretary the Business Secretary announced that the UK would withdraw its export finance for the gas project, coming five years after the deal ignited bitter opposition from activists over its effects on local communities, security, and the planet.
“Although these decisions are never straightforward, the government holds the view that UK financing of this project will not serve the needs of our nation,” stated the minister.
The decision came to light as the scheme's lead company, France-based energy major TotalEnergies, plans to resume the problem-plagued initiative, which has been on hold since a violent militant attack on a local town in 2021 caused over 800 of fatalities.
Background and Escalating Risks
The support package was first agreed in 2020. Authorities explained they had evaluated the potential problems surrounding the venture and determined they had increased substantially since that period.
Originally, the UK's export credit agency had said the project would create thousands of UK employment opportunities and could be “game-changing for Mozambique's financial and social progress.”
However, green organisations have maintained that the African country should be encouraged to channel resources more heavily in clean power to build a lasting low-carbon future.
Opposition and Appeals for Wider Withdrawal
The project became a lightning rod for insurgency in the region and was also alleged of infringing upon the human rights of residents who were relocated when development work began.
“It has been obvious for years that this project is a disaster for the people and for the environment,” said one advocate from a sustainable finance group. He urged major international banks supporting the project to end their backing, saying they “can no longer turn a blind eye the issues.”
Another leading climate advocate remarked: “This Mozambique gas project is a enormous source of emissions, linked to grave human rights abuses. It should never have been given UK public support in the first place.”
They further urged that the UK should instead assist nations like Mozambique by aiding them to adapt to the impacts of the climate crisis and invest in their abundant renewable resources.
The project developer has been contacted for response.
