Britain Withdraws Backing from Mozambique LNG Project Amid Rising Risks

Britain has withdrawn its $1.15 billion support for the Mozambique LNG project led by TotalEnergies due to increased risks. Initially promised in 2020, the project's financing has been a subject of scrutiny due to jihadist threats and human rights concerns. Most stakeholders aim to proceed using equity and alternative financings.

In a significant move, Britain's government announced it is retracting its $1.15 billion support for the TotalEnergies-led Mozambique LNG project amidst a backdrop of escalating risks. Initial backing, promised in 2020 through UK Export Finance, aimed to bolster the African nation's emergence as a major liquefied natural gas exporter to Europe and Asia.

The project faced a halt in 2021, owing to an Islamist insurgency. Although Total lifted force majeure last November, restarting construction is contingent on Mozambican government approvals, which may still face disputes. British business minister Peter Kyle emphasized that increased risks led to the decision to discontinue UK participation.

Despite Britain's withdrawal, TotalEnergies CEO Patrick Pouyanne assured investors that the project could advance without UK and Dutch financing. Alternative funding paths, human rights investigations, and potential court challenges continue to shape the project's future.

(With inputs from agencies.)