The US Export-Import Bank has sanctioned a $5bn (€4.61bn) loan to support the Mozambique LNG project spearheaded by TotalEnergies, marking a step towards resuming the $20bn venture.
This decision comes after a commitment of $4.7bn during President Donald Trump's previous tenure, which was re-evaluated after construction was suspended in 2021 amidst security concerns and violent disruptions near the project site in the Cabo Delgado province of Mozambique.
TotalEnergies CEO Patrick Pouyanne anticipated this positive outcome from the US, expressing last month that further endorsements from other credit agencies were expected to follow.
The project, which has been on hold since 2021 due to a force majeure, is also awaiting reapproval of loans from the UK and Dutch export credit agencies.
In a statement to the Financial Times, Mozambique's Minister for Energy, Estevao Pale, expressed his confidence in the UK and Netherlands reaffirming their support.
He said: “We are deeply grateful for President Trump and the American people’s support for this important LNG project.”
The Mozambique LNG project started in 2010 with the discovery of a large natural gas reserve off Mozambique's northern coast.
The project is estimated to hold approximately 65 trillion cubic feet (tcf) of recoverable natural gas and involves the construction of two liquefaction units with a capacity of 13 million tonnes per annum (mtpa), with prospects for expansion to 43mtpa.
However, the project’s progress was halted by an insurgency linked to the Islamic State, which caused security concerns and halted construction.
Improved security conditions have been reported, with Mitsui, a partner company, indicating that final preparations to recommence construction are in progress after renegotiations with contractors.
Despite these developments, environmental groups have argued that the security risks associated with the project should have warranted a denial of support.
Friends of the Earth Mozambique technical coordinator Daniel Ribiero said: “The human rights violations, armed conflict, environmental impacts and risky economic projections of the Mozambique LNG project should have kept most sensible investors away."
