The US has approved a $4.7 billion loan for TotalEnergies’ LNG project in Mozambique, described as a ‘carbon bomb.’ The project, faced with human rights abuse allegations and significant security concerns, aims to become one of Africa’s largest energy projects. Support has come under scrutiny from climate advocates, highlighting conflicts with global climate commitments.
The United States has approved a $4.7 billion loan for a liquefied natural gas (LNG) project in Mozambique, described as a potential “carbon bomb” and surrounded by human rights abuse allegations. This financial backing from the US Export-Import Bank (EXIM) is significant for the completion of the TotalEnergies-led project in Cabo Delgado, which has an estimated total cost of $20 billion. The approval also signifies a reversal from fading public funding for foreign oil and gas projects, which rich nations were nearing agreement to halt last year.
US EXIM previously agreed to finance the Mozambique project in 2019 during President Trump’s administration, but fresh approval was needed due to a “force majeure” situation caused by a militant attack in 2021 that halted construction. The attack, attributed to the Al-Shabaab group, resulted in approximately 1,200 civilian casualties. Following this event, investigations involving Total have emerged, with accusations of involuntary manslaughter and human rights violations against local civilians.
Although Total aimed to resume construction in 2024, they later acknowledged that operations would not commence before 2029 due to ongoing security and funding issues. Patrick Pouyanné, CEO of TotalEnergies, attempted to secure US support through lobbying efforts but ultimately faced challenges. Still, he emphasized that many contracts had been awarded to US firms, which he indicated could influence US government backing.
Climate advocates have criticized the Mozambique LNG initiative as a substantial threat to global climate goals, projecting potential emissions of 121 million tons of CO2 equivalent annually over the project’s lifespan. Activists like Collin Rees and Kate DeAngelis condemn the financial support decision as wasteful and detrimental, highlighting its contradiction with domestic socio-economic needs.
Total’s project also experienced backing from UK and Dutch export credit agencies before the halt, with both agencies currently reevaluating their commitments. Reports indicate that the UK government is consulting on whether it can withdraw its financial support without legal issues. The Biden administration faces scrutiny for continuing to sponsor fossil fuel projects abroad, despite prior commitments to reduce overseas public financing for fossil fuels presented at the 2021 COP26 climate summit. Recent geopolitical shifts have complicated these negotiations, indicating challenges ahead for international fossil fuel finance initiatives.
The US’s endorsement of a sizable loan for Mozambique’s LNG project reflects a complex interplay of political, economic, and environmental considerations. The project faces significant opposition from climate activists who argue it exacerbates both climate change and human rights issues. As rich nations grapple with funding foreign fossil fuels against their commitments to combat climate change, the future of such initiatives remains uncertain amid shifting geopolitical landscapes.
Original Source: www.climatechangenews.com
