UK Administration Pulls Substantial Loan for Mozambique Gas Project Amid Environmental and Terrorism Concerns
The UK government has pulled a contentious $1.15 billion loan supporting a large-scale LNG project in Mozambique, citing growing allegations that the initiative contributes to the climate emergency and insurgent violence in the region.
Official Announcement and Rationale
Business Secretary Peter Kyle stated that the UK would end its export finance for the gas project, coming five years after the agreement ignited strong backlash from advocacy groups over its effects on human rights, security, and the planet.
“Although these decisions are never simple, the administration considers that UK support of this project will not advance the needs of our country,” said the minister.
The move was revealed as the scheme's lead company, French oil major TotalEnergies, prepares to revive the troubled operation, which has been paused since a deadly Islamist insurgency on a local town in 2021 resulted in hundreds of deaths.
Background and Growing Risks
The loan guarantee was originally sanctioned in 2020. The government stated they had assessed the dangers associated with the venture and concluded they had escalated substantially since that period.
Originally, the UK's finance body had said the scheme would create over 2,000 of UK jobs and could be “game-changing for Mozambique's financial and societal progress.”
However, environmental campaigns have long argued that the African nation should be supported to invest more aggressively in sustainable sources to develop a viable green economy.
Criticism and Appeals for Broader Withdrawal
The project served as a lightning rod for violence in the area and was also accused of infringing upon the rights of local communities who were relocated when construction work started.
“It has been blatantly clear for years that this scheme is a catastrophe for the people and for the environment,” said one advocate from a sustainable finance group. The campaigner called on major financial institutions funding the venture to end their support, arguing they “can no longer turn a blind eye the issues.”
Another leading climate advocate remarked: “This Mozambique gas project is a huge source of emissions, connected to grave human rights abuses. It should never have been given UK taxpayer-funded backing in the first place.”
He further called for that the UK should instead support countries like Mozambique by aiding them to become resilient to the impacts of the climate crisis and invest in their rich clean energy sources.
The project developer has been approached for response.
