UK Withdraws Support from Controversial Mozambique LNG Project

The British government has withdrawn its $1.15 billion backing for the Mozambique LNG project due to increased risks. Originally supported in 2020, the project faced delays from an insurgency and is now criticized for human rights concerns. TotalEnergies seeks to uphold its financial rights.

The British government has retracted its $1.15 billion support for the Mozambique Liquefied Natural Gas (LNG) project, led by TotalEnergies, citing heightened risks. The UK initially offered financial backing via UK Export Finance in 2020, but has since ceased government aid for overseas fossil fuel ventures.

The $20 billion project, expected to position Mozambique as a key LNG exporter, was delayed due to militant activity. Although Total lifted force majeure in November, resuming construction hinges on Mozambican government budget approval, which remains disputed. British Business Minister Peter Kyle stated increased project risks prompted their withdrawal.

In the meantime, TotalEnergies plans to enforce its financial terms with UK and Dutch export finance arms. Environmental and human rights groups have criticized the project amid allegations of abuses, though TotalEnergies denies wrongdoing. Despite UK withdrawal, the U.S. Export-Import Bank approved a substantial loan for the initiative in March.

(With inputs from agencies.)