UK Government Pulls Major Loan for Mozambique Gas Project Due to Environmental and Terrorism Worries
The British government has withdrawn a contentious $1.15 billion loan backing a large-scale liquefied natural gas development in the African nation of Mozambique, citing growing concerns that the venture contributes to the climate emergency and terrorist attacks in the area.
Government Decision and Reasoning
Business Secretary Peter Kyle declared that the UK would terminate its financial support for the gas project, marking five years after the deal sparked fierce backlash from activists over its effects on local communities, security, and the planet.
“While these decisions are never easy, the administration considers that UK funding of this project will not further the interests of our nation,” stated Kyle.
The move was revealed as the scheme's developer, France-based oil major TotalEnergies, is set to revive the problem-plagued initiative, which has been paused since a devastating militant attack on a local town in 2021 resulted in over 800 of deaths.
History and Growing Risks
The loan guarantee was first agreed in 2020. The government stated they had evaluated the risks associated with the project and found they had grown substantially since that period.
At first, the UK's export credit agency had said the project would create over 2,000 of UK employment opportunities and could be “pivotal for Mozambique's economic and societal progress.”
However, environmental groups have long argued that the African nation should be aided to channel resources more aggressively in clean power to build a viable green economy.
Opposition and Appeals for Wider Withdrawal
The initiative became a lightning rod for terror in the region and was also alleged of infringing upon the human rights of indigenous people who were displaced when construction activities began.
“It has been blatantly clear for years that this scheme is a catastrophe for the people and for the environment,” said one advocate from a sustainable finance organisation. He pressed leading financial institutions supporting the venture to withdraw their support, arguing they “can no longer overlook the concerns.”
Another prominent environmental advocate added: “This LNG scheme is a huge climate liability, tied to significant human rights abuses. It should never have been given UK public backing in the first place.”
They further urged that the UK should instead assist nations like Mozambique by helping them to adapt to the effects of the climate change and put money in their rich renewable sources.
The project developer has been approached for comment.