A significant financial lifeline has been extended to Mozambique’s beleaguered liquefied natural gas (LNG) project, with the United States Export-Import Bank approving a near $5 billion loan. This crucial injection of capital breathes new life into the $20 billion venture, spearheaded by French energy giant TotalEnergies, which has been stalled since a devastating terrorist attack in 2021.
The US bank’s decision, reported by Reuters, represents a major step forward for the “Mozambique LNG” project, which aims to transform the country into a global LNG powerhouse. The loan, originally approved during the Trump administration, required re-approval after construction was abruptly halted following the Islamist insurgency’s assault on Palma town in Cabo Delgado province.
TotalEnergies CEO Patrick Pouyanne, who had anticipated US financing approval for months, now expects similar endorsements from UK and Dutch export credit agencies. This multi-national financial backing is critical for lifting the “force majeure” on the project, a legal declaration that has effectively frozen operations since the 2021 raid.
Mozambican Energy Minister Estevao Pale, speaking to the Financial Times, echoed this optimism, anticipating swift confirmation of support from the UK and Netherlands.
The project, in which TotalEnergies holds a 26.5% operating stake, was on the cusp of placing Mozambique on the world energy map. However, the 2021 jihadist attack shattered those ambitions, forcing a complete cessation of work.
Crucially, security conditions in the Afungi Peninsula, the site of the LNG plants, have significantly improved. The deployment of Mozambican and Rwandan troops has created a more stable environment, paving the way for the project’s resumption.
The approval of this substantial loan signals a renewed commitment from international stakeholders to Mozambique’s economic potential. With security concerns addressed and financial backing secured, the Mozambique LNG project is poised to reignite, offering a beacon of hope for the nation’s future.
