The British government has withdrawn its $1.15 billion backing for the TotalEnergies-led Mozambique Liquefied Natural Gas (LNG) project, it confirmed on Monday.
The commitment was originally made in 2020 through UK Export Finance (UKEF) to support the $20 billion development.
However, the pledge came shortly before the UK announced it would halt direct government financing for overseas fossil-fuel projects.
The project, once expected to position Mozambique as a significant LNG supplier to Europe and Asia, was suspended in 2021 following an Islamist insurgency in the country.
With jihadist attacks resurging, TotalEnergies has been transporting workers and equipment via air and sea as part of heightened security measures.
Although TotalEnergies lifted force majeure in November, the company said construction would only resume after the Mozambican government approves a revised project budget—an approval President Filipe Nyusi has indicated he may challenge.
“In preparation for restarting the project, UKEF received a request to amend the original financing terms,” British business minister Peter Kyle said in a statement.
“My officials evaluated the risks surrounding the project, and His Majesty’s Government believes these risks have increased since 2020.”
“The decision reflects a thorough assessment of the project and the best interests of UK taxpayers, which are served by ending our participation at this time,” he added.
TotalEnergies declined to comment on the development.
TotalEnergies insists on access to export support
In February, TotalEnergies CEO Patrick Pouyanné told investors that project shareholders were prepared to enforce their contractual rights to ensure UKEF and Atradius—the Dutch export-finance agency—honoured their original financing commitments.
Kyle noted that UKEF would reimburse the project for any premium paid, though the agency declined to specify the amount.
Meanwhile, Atradius said in July that a human rights due-diligence process was still underway, with no fixed completion timeline.
Separately, the U.S. Export-Import Bank approved a nearly $5 billion loan package for Mozambique LNG in March.
Rights and environmental groups voice strong opposition
Meanwhile, the project continues to face opposition from environmental and human-rights organisations.
Last month, nonprofit ECCHR filed a criminal complaint accusing TotalEnergies of complicity in torture and enforced disappearances allegedly carried out by Mozambican soldiers.
TotalEnergies has insisted there is no supporting evidence.
In April, UKEF appointed law firm Beyond Human Rights Compliance LLP to assess risks linked to the project following media reports of alleged abuses, according to three individuals interviewed by the firm.
In 2023, a London court dismissed a lawsuit filed by Friends of the Earth challenging the UK government’s support for the LNG development.
TotalEnergies owns a 26.5% operating stake in the project.
Japan’s Mitsui holds 20%, while Mozambique’s state-owned ENH controls 15%. Other partners include India’s ONGC and Oil India.
