The UK administration has pulled a contentious $1.15 billion loan backing a giant LNG project in the African nation of Mozambique, after mounting accusations that the venture contributes to the climate crisis and terrorist attacks in the area.
Business Secretary Peter Kyle declared that the UK would withdraw its financial support for the gas project, coming five years after the deal provoked bitter opposition from activists over its effects on local communities, safety, and the environment.
“Whilst these decisions are never easy, the government considers that UK funding of this project will not serve the needs of our country,” said the Business Secretary.
The move emerged as the scheme's lead company, French oil major TotalEnergies, is set to revive the problem-plagued operation, which has been on hold since a violent militant attack on a local town in 2021 led to hundreds of casualties.
The loan guarantee was first agreed in 2020. Authorities said they had evaluated the dangers surrounding the venture and determined they had grown markedly since that point.
Initially, the UK's export credit agency had claimed the project would support thousands of UK employment opportunities and could be “transformational for Mozambique's financial and societal development.”
However, green organisations have long argued that the African country should be encouraged to channel resources more aggressively in renewable energy to develop a lasting green economy.
The project served as a source for violence in the region and was also accused of violating the human rights of local communities who were moved when development work commenced.
“It has been evident for years that this scheme is a catastrophe for local communities and for the environment,” stated one campaigner from a sustainable finance group. He called on major international banks funding the venture to pull their involvement, saying they “can no longer ignore the issues.”
Another prominent climate advocate said: “This Mozambique gas project is a huge carbon timebomb, linked to serious violations. It should never have been given UK public backing in the first place.”
The campaigner further advocated that the UK should instead support nations like Mozambique by helping them to become resilient to the impacts of the climate change and invest in their plentiful clean energy potential.
The French energy company has been contacted for a statement.
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