Unlock the White House Watch newsletter for free
Your guide to what the 2024 US election means for Washington and the world
US President Donald Trump’s administration has unlocked almost $5bn in funding for a liquefied natural gas project by France’s TotalEnergies in Mozambique, potentially restarting work on one of Africa’s largest energy investments.
Mozambique’s minister for energy said on Thursday the US Export-Import Bank (Exim) had reapproved a $4.7bn loan for the project, originally granted in 2020 during Trump’s first presidency.
Work has been frozen since 2021, when TotalEnergies put its project on hold after Islamist insurgents killed civilians and workers in attacks near the site in Mozambique’s northern Cabo Delgado province.
In a statement on Thursday, Estevão Pale, Mozambique’s minister for energy, told the Financial Times it welcomed the decision by Exim, which would consolidate US leadership in development of a project that “will significantly help global energy security”.
“We are deeply grateful for President Trump and the American people’s support for this important LNG project,” he said.
American jobs are involved in the project and the funding could help maintain US influence in the region, but it comes as Trump and Elon Musk aim to cut back federal spending. The Exim loan was part of $14.9bn in senior debt financing that TotalEnergies agreed with a range of export credit agencies and banks in 2020.
Following the 2021 attacks, the French company made a declaration of force majeure, signalling elements outside its control had stopped the work. The declaration left the funding agreements frozen.
However, TotalEnergies has indicated that the security situation has stabilised in recent months, and it has worked to persuade financial backers to restate their support.
Chief executive Patrick Pouyanné lobbied senior Biden administration officials to approve the funding before Trump’s inauguration. He warned in letters that the transition of power could lead to “additional and lengthy delays” that could “undermine the financing structure, already in place and approved, and bring the entire project to a stop”.
TotalEnergies also enlisted consultancy Primus Responsum to lobby Exim to secure financing, offering a $250,000 bonus if the organisation could successfully confirm the project before Trump’s inauguration in January.
Exim did not immediately respond to a request for comment. The bank granted the approval even though Trump has embarked on a federal cost-cutting programme led by Musk’s so-called Department of Government Efficiency (Doge). The administration has also frozen most foreign aid.
While the US support was by far the largest element of the funding package, the LNG project also initially received financial backing from the governments of the UK and the Netherlands. Exim’s decision will increase pressure on those governments to offer similar reapproval of their financing.
Pale said he was still expecting the UK and Netherlands to reconfirm their support.
The FT reported last month that the British government was exploring legal remedies to extricate itself from the $1.15bn commitment it made in June 2020 in direct loans and guarantees.
Pouyanné told investors following the company’s annual results last month that he was ready to exercise all his contractual rights if export credit agencies declined their support.
The Total-led project is one of several plans to exploit Mozambique’s gas reserves. Development of the resources could transform the economy of one of southern Africa’s poorest countries and provide a well-located new source of gas to meet growing demand in Asia. The approval is a boost for other projects in the country, including a larger LNG development led by ExxonMobil.
However, environmental campaigners have opposed the development and it has been linked to allegations of human rights abuses by Mozambican soldiers charged with securing the area.
Kate DeAngelis, deputy director of Friends of the Earth US, criticised the re-approval as a “handout to the fossil fuel industry”.
“This is the pinnacle of government waste and an egregious abuse of taxpayer dollars,” she said.
Meanwhile, political instability in Mozambique following disputed elections at the end of 2024 has also delayed progress on restarting the project. President Daniel Chapo, who took office in January, made protection of the gas project and suppression of an anti-government insurgency a plank of his election campaign.
Read the full article here
