The UK has made a significant pivot by withdrawing a hefty $1.15 billion (£870 million) loan intended for a massive gas development in Mozambique, citing serious concerns over both climate change and regional security. This decision highlights the growing global debate over fossil fuels, environmental responsibility, and human rights, especially in regions plagued by conflict.
Recently, the UK government announced its move to retract its financial backing from the Mozambique liquefied natural gas (LNG) project. Business Secretary Peter Kyle explained that this adjustment comes five years after intense opposition from environmentalists, human rights advocates, and security experts who raised alarms about the project's potential to harm local communities and exacerbate regional instability.
Interestingly, this setback occurs as the project's developer, the French multinational oil and gas firm TotalEnergies, prepares to resume activities on the project—an effort that has been halted since 2021 following a brutal Islamist insurgency near a nearby town, which resulted in over 800 deaths. The conflict brought increased scrutiny on the project’s role in fueling violence and instability.
On Monday, Kyle stated that after a thorough review, UK Export Finance (Ukef), the government’s export credit agency, decided to cease support following an 'extensive evaluation of the project and the interests of UK taxpayers.' He emphasized that, although such decisions are often difficult, the government’s priority is to ensure its financial support aligns with national and ethical interests.
This support package was originally agreed upon in 2020, just over a year after members of Parliament’s environmental audit committee and the Labour Party strongly condemned the UK’s backing of fossil fuel projects abroad. They argued that such overseas investments undermine the UK’s commitments to combat climate change.
Kyle further clarified that officials assessed the project’s risks and concluded they had worsened since the initial approval in 2020. Initially, Ukef claimed that the project would generate over 2,000 jobs for UK workers—including small businesses—and could positively transform Mozambique’s economy and improve social conditions. Additionally, the natural gas produced was linked to a supply agreement with Centrica, owner of British Gas, which may have contributed to lowering energy costs for households in the UK.
However, opposition groups, including Friends of the Earth, argued that supporting such a project contradicts climate goals and human rights standards. They called for a judicial review of the UK government’s decision to financially back the gas project and urged Mozambique to pivot towards renewable energy sources, fostering long-term sustainability and economic resilience.
The project also became a focal point for regional instability and human rights violations, with criticisms that local communities were displaced without adequate consultation or compensation as development commenced.
Antoine Bouhey of Reclaim Finance pointed out that the UK government’s refusal to support the project anymore shows a recognition that the project is fundamentally flawed—riddled with problems that cannot be justified.
He additionally called out leading international banks like Standard Chartered, Crédit Agricole, and Société Générale, urging them to withdraw their financial support, suggesting they could no longer ignore the significant social and environmental issues tied to the project.
Meanwhile, Asad Rehman, the leader of Friends of the Earth, emphasized that the Mozambique LNG project acts as a 'carbon timebomb' linked to serious human rights abuses. He contended that UK taxpayers should never have been involved in financing such destructive endeavors in the first place. Rehman encouraged other nations to follow Britain’s example by ending their support and shifting focus to helping Mozambique adapt to climate impacts and develop clean energy resources, which could alleviate energy poverty affecting over 60% of the population.
TotalEnergies has yet to comment on the situation, leaving many questions about their next steps as the project’s future hangs in balance.
