UK Withdraws $1.15 Billion Loan for TotalEnergies’ Mozambique Gas Project Amid Security Concerns

The UK government said Monday it will not fund TotalEnergies’ LNG project in Mozambique. The French company paused the $20-billion project after a deadly jihadist attack in 2021. UK Export Finance (UKEF) decided to withhold up to $1.15 billion. TotalEnergies had planned to restart work this year. The company lifted the force majeure it declared during the siege.

Business Secretary Peter Kyle said the decision was not easy. He said UK financing would not benefit the country. The attack in Cabo Delgado killed about 800 people. Kyle said those risks made funding the project too dangerous. TotalEnergies owns 26.5 percent of the project. It wants $4.5 billion in extra costs. Mozambique is expected to cover some of these costs. The company hopes to restart production by 2029 if the government approves the new budget plan.

Local and international NGOs criticized TotalEnergies. They accused the company of holding Mozambique “hostage.” The firm demands very favorable terms to resume the project. Other international firms are involved too. Italy’s ENI and U.S. oil giant ExxonMobil are part of the region’s gas ventures. Analysts say these projects could make Mozambique a top African gas producer. By 2040, the country may supply 20 percent of the continent’s gas.

The UK government said it still supports British exporters through UKEF. Kyle added that the UK aims to build strong, respectful partnerships with African countries. He said this would boost growth, address insecurity, and fight climate change. The UK will continue caution in conflict zones. TotalEnergies continues negotiations but risks remain.