TotalEnergies’ LNG project in Mozambique secures a US$4.7 billion loan from the US Export-Import Bank, aiding a project facing delays due to local insurgency. Despite environmental and human rights concerns, EXIM’s funding emphasizes a tension between climate commitments and fossil fuel financing. Delays push project restart to 2029 amid continued scrutiny.
The TotalEnergies liquefied natural gas (LNG) project in Mozambique is set to receive a significant loan of US$4.7 billion, a critical boost for a long-delayed project characterized as a “carbon bomb.” This support from the US Export-Import Bank (EXIM) is essential for accessing additional financing for the estimated US$20 billion project, which has faced numerous challenges from insurgent activities in the region.
Following an initial agreement in 2019 to fund the project during the Trump administration, operations were halted due to a violent assault by Islamist terrorists, resulting in a tragic loss of life. In response, TotalEnergies declared force majeure, requiring new approvals before financing could move forward. The company had hoped to renew construction earlier, but due to security and financial concerns, the timeline has now been pushed to 2029.
Despite lobbying efforts for funding from the Biden administration, TotalEnergies CEO Patrick Pouyanné found no success. However, with changes in the EXIM board, he expressed optimism about the newfound support for projects like TotalEnergies. This contrasts with the Biden administration’s commitment made at the COP26 climate summit to eliminate direct public financing for fossil fuel initiatives by 2022.
In a backdrop of international financing, OECD countries allocate approximately US$40 billion annually for overseas fossil fuel projects, including in Mozambique. The TotalEnergies project poses significant climate risks, with projections estimating annual CO2 emissions potentially reaching up to 121 million tonnes. Environmental groups have criticized the project as a waste of taxpayer resources and detrimental to both climate and human rights.
TotalEnergies is currently facing scrutiny for its safety measures in light of allegations of human rights abuses against subcontractors following the Al-Shabaab attacks. Legal investigations have been initiated in France concerning potential involuntary manslaughter, while an investigative report disclosed accusations against Mozambican soldiers linked to the company for heinous crimes against civilians. The EXIM’s decision to fund the project appears impervious to these human rights concerns, particularly against the backdrop of funding cuts for US international aid in Cabo Delgado.
In conclusion, the TotalEnergies LNG project in Mozambique, described as a significant climate threat, is receiving crucial funding from the US EXIM Bank, despite pressing security concerns and allegations of human rights violations tied to the project. The approval underscores a conflicting stance on climate commitments made internationally while facilitating large-scale fossil fuel developments. As the timeline for construction is extended to 2029, the ramifications of such a project remain contentious within the context of both environmental sustainability and human rights advocacy.
Original Source: macaonews.org
