British Government Pulls Substantial Financing for Mozambican Gas Project Due to Climate and Terrorism Worries
The UK government has canceled a contentious $1.15 bn loan for a large-scale liquefied natural gas scheme in Mozambique, after mounting accusations that the initiative contributes to the climate emergency and terrorist unrest in the region.
Government Decision and Rationale
Business Secretary Peter Kyle stated that the UK would end its backing for the gas venture, marking five years after the agreement provoked bitter backlash from advocacy groups over its effects on human rights, safety, and the planet.
“While these decisions are never easy, the government believes that UK funding of this scheme will not serve the interests of our nation,” said the minister.
The move emerged as the project's developer, France-based oil giant TotalEnergies, is set to restart the delayed operation, which has been suspended since a deadly militant attack on a local town in 2021 led to hundreds of fatalities.
Background and Escalating Concerns
The loan guarantee was first agreed in 2020. Officials explained they had assessed the dangers surrounding the venture and found they had increased significantly since that period.
At first, the UK's export credit agency had claimed the project would sustain thousands of UK jobs and could be “transformational for Mozambique's financial and societal development.”
However, environmental campaigns have long argued that the African nation should be aided to channel resources more aggressively in renewable energy to develop a sustainable green economy.
Criticism and Appeals for Broader Action
The initiative served as a focal point for insurgency in the region and was also alleged of violating the rights of indigenous people who were displaced when construction activities commenced.
“It has been obvious for years that this project is a failure for local communities and for the climate,” commented one activist from a sustainable finance organisation. He urged leading financial institutions funding the venture to withdraw their backing, stating they “can no longer turn a blind eye the concerns.”
Another leading environmental campaigner said: “This LNG scheme is a enormous carbon timebomb, linked to significant human rights abuses. It should never have been given UK taxpayer-funded backing in the first place.”
He further advocated that the UK should instead help countries like Mozambique by aiding them to adapt to the effects of the climate crisis and put money in their plentiful clean energy resources.
The French energy company has been approached for response.
