TotalEnergies’ massive liquified natural gas (LNG) project in Mozambique is to receive a US$4.7-billion loan, a lifeline for the “carbon bomb” fossil gas plant long-delayed by insurgent Islamist terrorists in the region, reports Climate Home News.
The backing of the US Export-Import Bank (EXIM), a federal agency, is seen as key to unlocking additional financing for the project, estimated at US$20 billion. EXIM previously agreed to fund the project in 2019, during US President Donald Trump’s first administration, but two years later, a massive assault by local Islamist terrorist groups forced the French energy company to pull out of Mozambique.
Construction on the project in northern Cabo Delgado Province ceased after the Al-Shabaab attack, in which as many as 1,200 people were killed or went missing. TotalEnergies’ actions triggered a contractual force majeure pause, requiring fresh approval for the financing to go through.
The company had hoped to start construction last year, as Mozambican and allied forces made significant progress in eradicating the terrorist group, but conceded in January this year that continued security concerns and funding issues would push the restart to 2029.
TotalEnergies CEO Patrick Pouyanné lobbied hard late last year to secure funding from the outgoing Biden administration with no luck. With the new board, appointed by Trump, Pouyanné told Bloomberg that “now you have a functional US EXIM.”
The agency approved billions for oil and gas development overseas under Biden, despite the US joining 33 other countries at the COP26 climate summit to pledge an end to direct public finance for overseas fossil fuel projects by the end of 2022.
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A last-minute attempt by Biden to back an Organisation for Economic Cooperation and Development (OECD) proposal banning such support, an effort led by the European Union and UK, failed due to opposition from two member nations.
The export credit agencies of OECD countries provide around US$40 billion to support overseas fossil fuel projects every year, including in Mozambique. But few can rival the climate impacts of the TotalEnergies mega-project, producing up to 121 million tonnes of CO2 equivalent annually over a nearly 40-year lifecycle, according to calculations by Friends of the Earth, a UK-based environmental organisation.
Supporting the Total project is “the pinnacle of government waste and an egregious abuse of taxpayer dollars,” Kate DeAngelis, economic policy deputy director at Friends of the Earth US, told Climate Home. Collin Rees, US campaign manager at Oil Change International, agreed and condemned the project as a “climate and human rights disaster.”
French authorities began investigating TotalEnergies for possible involuntary manslaughter last year after survivors of the 2021 Al-Shabaab attack accused the company of failing to secure the safety of its subcontractors. Total rejected the accusations.
A journalistic investigation by Politico meanwhile alleges that Mozambican soldiers operating out of the French company’s plant abducted, raped and killed dozens of civilians. Total’s Mozambican subsidiary told Politico it had no knowledge of the events.
Being linked to such alleged human rights violations appears to have been shrugged off by US EXIM, which announced the multi-billion-dollar investment amid staggering cuts to US international aid programmes – including projects geared toward stabilising the situation in Cabo Delgado – which the Trump administration deemed as not serving the country’s national interest.
