British Administration Cancels Major Loan for Mozambican Gas Initiative Amid Climate and Terrorism Concerns
The UK government has canceled a controversial $1.15 billion loan backing a giant LNG project in Mozambique, following increasing allegations that the venture exacerbates the global warming and militant unrest in the region.
Government Announcement and Reasoning
Business Secretary Peter Kyle declared that the UK would withdraw its export finance for the gas venture, coming five years after the deal ignited fierce opposition from campaigners over its effects on local communities, safety, and the planet.
“Whilst these decisions are never simple, the government believes that UK funding of this scheme will not serve the interests of our country,” remarked the Business Secretary.
The decision came to light as the scheme's lead company, France-based oil major TotalEnergies, plans to resume the troubled operation, which has been on hold since a deadly Islamist insurgency on a nearby town in 2021 resulted in over 800 of casualties.
Background and Escalating Concerns
The support package was first agreed in 2020. The government explained they had assessed the potential problems associated with the venture and concluded they had increased markedly since that point.
Initially, the UK's export credit agency had said the scheme would sustain over 2,000 of UK employment opportunities and could be “game-changing for Mozambique's financial and social progress.”
However, green groups have long argued that the east African country should be encouraged to invest more aggressively in sustainable sources to develop a viable low-carbon future.
Criticism and Calls for Wider Withdrawal
The initiative became a focal point for violence in the area and was also accused of violating the rights of residents who were displaced when development work started.
“It has been obvious for years that this scheme is a failure for local communities and for the environment,” commented one activist from a ethical investment organisation. He urged leading international banks backing the venture to end their involvement, arguing they “can no longer turn a blind eye the issues.”
Another prominent environmental campaigner remarked: “This Mozambique gas project is a massive climate liability, tied to serious human rights abuses. It should never have been given UK taxpayer-funded backing in the first place.”
They further urged that the UK should instead assist countries like Mozambique by helping them to adapt to the impacts of the climate crisis and invest in their abundant clean energy resources.
The project developer has been approached for a statement.
