The UK government has withdrawn a contentious $1.15 bn loan backing a large-scale LNG scheme in Mozambique, citing growing accusations that the venture contributes to the global warming and insurgent attacks in the region.
Official Decision and Rationale
Business Secretary Peter Kyle announced that the UK would withdraw its financial support for the Mozambique LNG venture, marking five years after the deal sparked fierce backlash from activists over its effects on human rights, security, and the planet.
“While these decisions are never straightforward, the government believes that UK support of this project will not serve the needs of our country,” said the Business Secretary.
The move came to light as the scheme's developer, France-based energy major TotalEnergies, prepares to restart the problem-plagued initiative, which has been paused since a violent Islamist insurgency on a local community in 2021 caused over 800 of casualties.
Background and Escalating Risks
The financing deal was first agreed in 2020. The government stated they had reviewed the potential problems linked to the venture and concluded they had escalated substantially since that period.
Initially, the UK's export credit agency had said the project would sustain over 2,000 of UK employment opportunities and could be “pivotal for Mozambique's economic and social progress.”
However, environmental organisations have consistently contended that the east African nation should be encouraged to channel resources more heavily in sustainable sources to build a viable green economy.
Opposition and Appeals for Broader Withdrawal
The initiative became a source for violence in the area and was also alleged of violating the human rights of local communities who were relocated when construction work started.
“It has been blatantly clear for years that this scheme is a failure for the people and for the environment,” said one campaigner from a sustainable finance group. He called on leading international banks funding the venture to withdraw their involvement, arguing they “can no longer overlook the problems.”
Another leading climate advocate said: “This LNG scheme is a enormous source of emissions, connected to grave human rights abuses. It should never have been given UK public support in the first place.”
He further advocated that the UK should instead assist nations like Mozambique by helping them to become resilient to the effects of the climate crisis and put money in their abundant renewable resources.
TotalEnergies has been contacted for a statement.
