The U.S. Export-Import Bank approved a nearly $5 billion loan for TotalEnergies, allowing the restart of a Mozambique LNG project that had stalled due to regional violence. The project aims to position Mozambique as a major LNG producer but faces criticism from environmental groups regarding its safety and ethical implications.
The U.S. Export-Import Bank has authorized a loan close to $5 billion to TotalEnergies for a liquefied natural gas (LNG) project in Mozambique, allowing the long-delayed initiative to progress. Although an earlier loan of $4.7 billion was approved during the Trump administration, the project was stalled in 2021 due to violence in the Cabo Delgado region, requiring re-approval.
Patrick Pouyanne, CEO of TotalEnergies, had anticipated that financing from the U.S. would be granted soon, with subsequent approvals from other credit agencies expected in the following months. The company had put a force majeure on the project, blocking progress until it secured funding from the U.S., UK, and Netherlands.
Mozambique LNG, where TotalEnergies owns a 26.5% stake, aimed to establish Mozambique as a key player in the global LNG market. The initiative faced interruptions from an insurgency linked to the Islamic State, but recent improvements in regional security have prompted discussions of resuming construction. Mitsui, a partner in the project, reported that final arrangements were being made to restart work after negotiations with contractors.
Despite the green light for funding, environmental advocates have raised concerns about the project’s risks. Daniel Ribiero of Friends of the Earth Mozambique commented on the potential human rights abuses and environmental impacts, arguing that these factors should have deterred investor involvement.
The U.S. Export-Import Bank’s approval of a nearly $5 billion loan for TotalEnergies marks a significant step in reviving a halted LNG project in Mozambique. Despite security improvements and expectations of further financing from the UK and Netherlands, the project faces criticism over its adherence to human rights and environmental standards.
Original Source: www.tradingview.com
