The British government has announced that it will no longer provide a loan to TotalEnergies for a gas project in Mozambique. The decision to withhold up to $1.15 billion in financing for the liquefied natural gas (LNG) project follows a jihadist attack that halted the venture. The consortium led by TotalEnergies lifted its suspension on the work in October, but the UK’s Export Finance agency (UKEF) decided that further funding would not advance British interests.
The $20 billion project was initially paused in 2021 after a deadly attack in the northeastern Cabo Delgado province killed an estimated 800 people. TotalEnergies, which owns 26.5 percent of the development, declared force majeure and asked the Mozambican government to cover $4.5 billion in cost overruns linked to the delay. The company aims to resume production at the gas site in 2029, pending approval of Mozambique’s new budget plan.
Business Secretary Peter Kyle said the UK remains committed to supporting British exporters and its partnership with Mozambique to promote sustainable growth and address insecurity, even as financing for this particular project is withdrawn. Mozambican and international NGOs have criticised TotalEnergies for “holding the country hostage” with its demands for favourable conditions to restart the project. Environmental groups also warn that the gas developments could cause severe ecological damage while delivering little benefit to a population where over 80 percent live below the poverty line.
The project forms part of a broader effort to develop Mozambique’s natural‑gas reserves, which could place the country among the world’s top ten gas producers by 2040. However, the development of these projects has been fraught with controversy over environmental and social impacts. The UK’s decision to pull funding underscores the complexities and challenges of pursuing large‑scale energy projects in regions plagued by conflict and poverty.
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