The United States has approved a $4.7 billion loan to TotalEnergies for a Mozambique gas plant, igniting controversy due to environmental and human rights concerns. This decision marks a significant shift from potential restrictions on fossil fuel financing and raises questions about the implications of supporting such projects in light of climate commitments. Critics warn the project could significantly contribute to global emissions over its lifespan.
The United States has approved a $4.7 billion loan for a fossil gas plant in Mozambique, which has been labeled a “carbon bomb” and is embroiled in human rights allegations. The US Export-Import Bank (EXIM) facilitated financing for the liquefied natural gas (LNG) project led by TotalEnergies in Cabo Delgado. Although EXIM has not publicly confirmed the arrangement, multiple reports have confirmed the approval.
This financial backing is crucial as it aims to unlock resources for what is projected to be one of Africa’s largest energy projects, with a total anticipated cost of $20 billion. The decision signifies a reversal from a prior proposal to restrict public funding for oil and gas ventures overseas—a commitment that wealthy nations, including the US, were nearing at the end of the previous year.
EXIM had already pledged support to the Mozambique project in 2019 during President Donald Trump’s administration; however, renewed approval was necessary after TotalEnergies invoked a contractual force majeure in 2021. This event followed attacks by the Al-Shabaab militant group, resulting in the loss of up to 1,200 civilian lives in Cabo Delgado.
Investigations into TotalEnergies have also emerged, with French authorities reviewing allegations of possible involuntary manslaughter due to the company’s purported failure to safeguard its workers. Despite these claims, which also include accusations of Mozambican soldiers committing serious human rights abuses, Total has denied any knowledge or wrongdoing related to the allegations.
In light of ongoing security issues and funding uncertainties, TotalEnergies acknowledged earlier this year that it would not resume construction until after 2029, having previously aimed to restart in 2024. CEO Patrick Pouyanné expressed expectations of government support and noted that most project contracts were allocated to US firms, indicating a rationale behind US backing for the initiative.
Opponents of the Mozambique LNG project have vehemently criticized it as a “carbon bomb,” asserting it risks exacerbating global warming. Friends of the Earth calculated that the project could release up to 121 million tonnes of CO2 equivalent annually over its nearly four-decade lifespan. Collin Rees of Oil Change International condemned the venture as a profound “climate and human rights nightmare.”
Kate DeAngelis from Friends of the Earth US described EXIM’s decision as an egregious use of taxpayer funds, suggesting a prioritization of billionaire and foreign gas company interests over essential public services. Furthermore, since Trump’s presidency, over 80% of US international aid programs have been canceled, effectively ignoring Mozambique’s needs.
Additional scrutiny is facing the project, as UK and Dutch export credit agencies reassess their support in light of previous allegations and their potential legal responsibilities. The UK government has sought legal advice regarding its financial commitment to the project, with calls for reconsideration from climate advocates.
While the Biden administration had previously aimed to shift in favor of reducing fossil fuel financing, EXIM nonetheless approved considerable funds for oil and gas projects overseas. Negotiations among OECD member states aimed at banning such support have stalled, diminishing hopes for a unified stance on future fossil fuel financing globally.
The recent US approval of a $4.7 billion loan for the Mozambique gas plant highlights a significant conflict between climate commitments and fossil fuel financing. Despite allegations of human rights abuses and environmental concerns, the project is positioned as a vital energy venture for Africa. This decision not only demonstrates a shift in policy under the current administration but also raises critical questions about climate responsibility among wealthy nations and their engagement with high-risk energy projects. Continued scrutiny and opposition by environmentalists underline the growing tension between fossil fuel interests and sustainable development.
Original Source: www.climatechangenews.com
