The board of the U.S. Export-Import Bank has approved a nearly $5 billion loan for a long-stalled LNG project in Mozambique.
- U.S. Export-Import Bank approves nearly $5 billion loan for LNG project in Mozambique.
- Project led by TotalEnergies faces security threats and timeline delays.
- TotalEnergies anticipates U.S. financing approval with other credit agencies expected to follow.
The board of the U.S. Export-Import Bank has approved a nearly $5 billion loan for a long-stalled LNG project in Mozambique, marking a major step toward resuming development led by French oil giant TotalEnergies.
TotalEnergies initially estimated that the Mozambique LNG project would be operational by 2029. However, earlier this year, the company stated that this timeline is no longer feasible, according to Reuters.
The landmark project, based in Cabo Delgado, has faced severe security threats, including attacks by Islamist insurgents which led to the declaration of force majeure and a subsequent suspension of construction.
Financing hurdles
The U.S. Export-Import Bank had initially committed $4.7 billion to the $20 billion project during Donald Trump’s administration. However, the loan required re-approval after construction was halted in 2021, preventing any funds from being disbursed.
TotalEnergies CEO Patrick Pouyanne stated last month that he anticipated U.S. financing approval within weeks, with other credit agencies expected to follow in the coming months.
Mozambique LNG, in which TotalEnergies holds a 26.5% operating stake, was expected to transform the southern African nation into a major LNG producer. However, the project was suspended after an Islamic State-linked insurgency swept through the region.
Since then, security conditions have improved, with project partner Mitsui stating in December that final preparations were underway to resume construction following renegotiations with contractors.
Despite this, environmental groups argue that the security risks associated with the project should have been reason enough to deny financial support.
