Britain and the Netherlands are withdrawing a combined $2.2 billion in support for the TotalEnergies-led Mozambique LNG project, officials said on Monday, after hiring firms to investigate human rights concerns.
The British government said it would pull back its $1.15 billion backing, which included a $300 million loan and $700 million in insurance via UK Export Finance, originally promised in 2020.
The Dutch government confirmed Total had withdrawn a $1.1 billion export insurance request. Atradius Dutch State Business had authorised $1.3 billion in export insurance, with the larger policy cancelled at Total’s request.
TotalEnergies and Mozambique’s government declined to comment, Reuters reported.
Construction on Mozambique LNG was halted in 2021 due to an Islamist insurgency. Total lifted force majeure in November but restarting the project depends on Mozambican government approval of a new budget, which the president may dispute.
“In preparation to restart the project, UKEF was presented with a proposal to amend the financing terms it had agreed originally,” British Business Minister Peter Kyle said.
“My officials have evaluated the risks around the project, and it is the view of His Majesty’s Government that these risks have increased since 2020. The interests of UK taxpayers are best served by ending our participation in the project at this time.”
Don’t Miss This:
Oil India Expects Restart Of Mozambique LNG Project By Year’s End
Jihadist attacks have increased in Mozambique, prompting Total to transport workers and equipment this year by air and sea.
Despite the withdrawal of UK and Dutch financing, TotalEnergies CEO Patrick Pouyanne said in April that the project could continue using equity, as over 70% of financing is secured and 90% of future gas production is commercialized. Kyle added that UKEF would reimburse the project for any premiums paid.
The Dutch finance minister said Total requested the cancellation of part of its insurance on November 24, as an independent human rights review was being finalized.
“This means that the Netherlands will no longer be involved in financing the project,” the statement read. A $213 million policy insuring Dutch contractor Van Oord remains in effect.
TotalEnergies holds a 26.5% stake in Mozambique LNG. Japan’s Mitsui owns 20%, Mozambique’s ENH 15%, and smaller stakeholders include India’s ONGS and Oil India. In March, the U.S. Export-Import Bank approved nearly $5 billion for the project.
Human rights nonprofit ECCHR filed a criminal complaint last month against Total, alleging complicity in torture and enforced disappearances by Mozambican soldiers.
UKEF hired law firm Beyond Human Rights Compliance LLP in April to assess risks. TotalEnergies denied the allegations, calling them unproven.
The Dutch government said its commissioned firms, Clingendael and Pangea Risk, found the torture claims credible but could not determine Total’s knowledge or involvement.
In 2023, a London court dismissed a challenge by Friends of the Earth against the UK government’s funding for the project.
Don’t Miss This:
TotalEnergies Says Mozambique LNG Project Costs Have Increased By $4.5 Billion
Image Credit: Reuters
