The UK government has withdrawn more than $1 billion in planned financing for TotalEnergies' liquefied natural gas project in Mozambique, adding pressure to a development already delayed by insecurity and rising costs. UK Export Finance had committed $1.15 billion to the facility, one of eight export credit agencies backing the project's $14.9 billion financing package.
Business Secretary Peter Kyle said a review concluded that risks around Mozambique LNG had increased, leading the government to end its involvement. TotalEnergies halted construction in 2021 after Islamic State-linked militants attacked the nearby town of Palma. While major assaults have declined since mid-2024, smaller raids in Cabo Delgado province have picked up, and the UK continues to warn against travel to the area.
The exit follows a similar move by the Netherlands, whose export credit insurer ended its planned participation after TotalEnergies said it would proceed without the support. The French company, which owns 26.5% of the project, has said in the past it could close any financing gap with equity if needed. In March, the US Export-Import Bank approved a $4.7 billion loan, the largest tranche of support. TotalEnergies did not immediately comment.
Key Takeaways
Keep up with the latest headlines on WhatsApp | LinkedIn
The withdrawal underscores the shifting risk appetite among export credit agencies toward large fossil-fuel projects in fragile states. Mozambique LNG was once positioned as a transformational investment that could turn the country into a major gas exporter, but escalating security concerns, mounting costs, and scrutiny of alleged human rights abuses have complicated its restart. For TotalEnergies, securing U.S. Exim's backing remains central to reviving the project, but losing European support narrows its financing options and increases reliance on equity or commercial lenders. The decision also has implications for Mozambique's broader economic plans, which depend heavily on gas exports to stabilise public finances. As security remains volatile, investors and governments are reassessing timelines and risk exposure across the LNG value chain.
