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The British government has formally announced that it will withdraw its USD 1.15 billion financial backing for the large-scale Mozambique Liquefied Natural Gas (LNG) project led by TotalEnergies. The move marks a sharp reversal from the UK’s 2020 commitment, when it agreed—through UK Export Finance (UKEF)—to support the venture just before pledging to end public funding for overseas fossil-fuel projects.
When approved in 2020, the USD 20 billion Mozambique LNG project was expected to turn the country into a major exporter of natural gas to Europe and Asia. It was seen as a strategic undertaking that would strengthen global energy security and diversify gas supplies. However, that optimism faded as escalating violence tied to an Islamist insurgency in Cabo Delgado forced TotalEnergies to halt operations in 2021.
Instability has continued to undermine progress. Jihadist attacks have resurged in recent months, prompting TotalEnergies to evacuate staff and equipment by both air and sea. The persistent conflict has resulted in a four-year suspension, pushing up project costs by an additional USD 4.5 billion. Although TotalEnergies lifted force majeure in November, the company said work could only resume once the Mozambican government approves a revised budget—approval that may face political hurdles.
According to UK Business Minister Peter Kyle, UKEF had been asked to adjust the project’s financing terms in preparation for a restart. After reassessing the situation, the government concluded that the risks surrounding the project have grown substantially since 2020. Kyle noted that a comprehensive review determined it would be in the best interest of UK taxpayers to withdraw support, leading to the cancellation of the financing agreement. UKEF will refund previously paid premiums, though the amount has not been disclosed.
The UK’s exit comes amid broader financial and human-rights scrutiny. In February, TotalEnergies CEO Patrick Pouyanné warned that project shareholders could invoke contractual rights to compel UKEF and the Dutch export credit agency Atradius to release their committed funds. Atradius later reported that an independent human-rights assessment remains ongoing with no set completion date. By contrast, the U.S. Export-Import Bank signalled continued confidence in the project by approving nearly USD 5 billion in funding in March.
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The Mozambique LNG venture is backed by a wide group of international partners, including TotalEnergies (26.5%), Mitsui of Japan (20%), Mozambique’s state-owned ENH (15%), Bharat Petroleum (10%), Oil India (10%), ONGC Videsh (10%), and Thailand’s PTTEP (8.5%). Nearby, Exxon Mobil is also advancing a separate LNG development, underscoring the region’s ongoing importance in global natural-gas production.
