TotalEnergies ambitious $20 billion Mozambique Liquefied Natural Gas (LNG) project has hit a significant roadblock after failing to secure crucial financial backing from the Biden administration before its term ended. The project, which was once heralded as Africa’s largest energy investment, has been on hold since 2021 due to an Islamist insurgency in the region after Islamist insurgents killed dozens of workers near the company site in Mozambique’s northern Cabo Delgado province. Leading to a declaration of “force majeure” by TotalEnergies.
In an effort to salvage the project’s financing, CEO Patrick Pouyanné penned urgent letters to U.S. Secretary of State Antony Blinken, National Security Adviser Jake Sullivan, and Secretary of Commerce Gina Raimondo in December, pressing for the release of nearly $5 billion in loans.
Pouyanné highlighted the risk of “additional and lengthy delays” under the incoming Trump administration, which could potentially dismantle the project’s financial structure. However, the U.S. Export-Import Bank (EXIM) confirmed that it had not finalized the loan terms by the critical date of January 20, 2025, Trump’s inauguration day. EXIM’s new leadership is now conducting a fresh evaluation of the proposed terms.
The Mozambique LNG project, which saw initial financing approval in 2020 with support from the U.S., UK, and other nations, became the largest foreign direct investment project. The project has been mired in controversy, due to security issues, environmental concerns, and allegations of human rights abuses.
Reports from Le Monde and Italian NGO ReCommon revealed that TotalEnergies was aware of human rights violations by Mozambican soldiers tasked with securing the project area. In response, TotalEnergies claimed to have implemented a grievance mechanism to handle such allegations.
The project’s timeline has been further complicated by ongoing regional insecurity, preventing any resumption of work. The Financial Times recently noted that TotalEnergies had not met its goal to restart by the end of 2024, threatening the planned 2029 production start. Security conditions remain a pivotal issue, with Pouyanné unable to visit Mozambique in October due to violent protests following disputed elections.
In a recent development, Pouyanné met with Mozambique’s new President Daniel Chapo at an energy conference in Dar es Salaam, where he reiterated his commitment to reviving the project. However, the urgency for securing funding is evident from TotalEnergies’ decision to hire consultancy firm Primus Responsum, offering a hefty $250,000 bonus for securing EXIM’s approval by January 20, as per Bloomberg’s report.
Beyond the U.S., the project’s financial support is also under review by other stakeholders. The UK’s Export Finance is in discussions regarding the project’s status and the ongoing force majeure, having previously committed $1.15 billion.
The Dutch credit agency Atradius is reassessing its €1 billion in export credit insurance. Meanwhile, both Japan and Italy have agreed to finance the project, but as Italian Business Minister Fausta Bergamotto pointed out, all involved parties must unanimously approve for funds to be disbursed.
With these challenges, the TotalEnergies Mozambique LNG project stands at a crossroads, balancing between security, finance, and international diplomacy to bring one of Africa’s most significant energy initiatives back on track.
