The British administration has pulled a contentious $1.15 bn loan supporting a large-scale LNG project in Mozambique, citing increasing concerns that the venture contributes to the climate crisis and terrorist attacks in the province.
Official Decision and Reasoning
Business Secretary Peter Kyle declared that the UK would end its backing for the Mozambique LNG venture, marking five years after the agreement ignited strong backlash from advocacy groups over its effects on human rights, security, and the environment.
“Although these decisions are never simple, the government believes that UK funding of this scheme will not serve the needs of our nation,” stated the minister.
The decision came to light as the scheme's developer, French energy giant TotalEnergies, is set to restart the delayed initiative, which has been paused since a devastating militant attack on a local community in 2021 resulted in over 800 of fatalities.
Background and Growing Risks
The financing deal was initially approved in 2020. Authorities explained they had reviewed the risks surrounding the venture and found they had escalated markedly since that time.
Originally, the UK's export credit agency had argued the scheme would support over 2,000 of UK employment opportunities and could be “pivotal for Mozambique's economic and societal development.”
However, green groups have long argued that the east African country should be aided to channel resources more aggressively in clean power to build a sustainable low-carbon future.
Opposition and Calls for Broader Withdrawal
The project became a focal point for terror in the area and was also accused of infringing upon the rights of local communities who were relocated when development activities began.
“It has been blatantly clear for years that this scheme is a disaster for the people and for the environment,” said one activist from a ethical investment group. He called on leading financial institutions funding the venture to pull their support, arguing they “can no longer ignore the problems.”
Another leading environmental campaigner remarked: “This LNG scheme is a huge source of emissions, linked to grave human rights abuses. It should never have been given UK public backing in the first place.”
The campaigner further called for that the UK should instead assist countries like Mozambique by aiding them to adapt to the effects of the climate crisis and put money in their abundant clean energy resources.
The project developer has been approached for response.
