The U.S. Export-Import Bank has approved a nearly $5 billion loan for the Mozambique LNG project by TotalEnergies, overcoming prior delays caused by violence in the Cabo Delgado region. TotalEnergies anticipates further support from credit agencies amid concerns regarding environmental and security risks. Mozambique’s Energy Minister foresees the UK and Dutch agencies reaffirming their backing, while environmental groups raise significant objections to the project.
The U.S. Export-Import Bank has sanctioned a loan totaling nearly $5 billion for the resumption of a long-stalled LNG project in Mozambique, developed by TotalEnergies. This approval is pivotal in advancing the $20 billion initiative, initially authorized for a $4.7 billion loan during the Trump administration, which required re-approval due to prior construction delays from unrest in the Cabo Delgado region in 2021.
TotalEnergies’ Chief Executive Officer, Patrick Pouyanne, expressed optimism regarding the approval of U.S. financing, anticipating that other credit agencies would follow suit in the upcoming months. The enterprise was awaiting authorization from U.S., UK, and Dutch export credit institutions to lift the force majeure declared on the project since 2021.
Estevao Pale, Mozambique’s Energy Minister, conveyed expectations that the support from the UK and Netherlands would be reaffirmed soon. TotalEnergies holds a 26.5% operational share in Mozambique LNG, which aimed to elevate the nation to a notable LNG producer before the project’s progression was impeded by an insurgency linked to Islamic State militants.
Recently, security in the region has improved, prompting partner firm Mitsui to announce in December that preparations for resuming construction were underway following negotiations with contractors. Nevertheless, environmental advocates argue that the associated security risks warrant the denial of support for this project.
Daniel Ribiero, the technical coordinator for Friends of the Earth Mozambique, stated, “The human rights violations, armed conflict, environmental impacts and risky economic projections of the Mozambique LNG project should have kept most sensible investors away.”
The U.S. Export-Import Bank’s approval of a nearly $5 billion loan for TotalEnergies marks a significant advancement for the Mozambique LNG project, which had been stalled due to regional unrest. As security conditions improve, the anticipation for further financial backing from other nations remains. However, ongoing concerns regarding environmental impact and human rights violations underline the complexities surrounding this project.
Original Source: www.tradingview.com
