Total funders weigh Mozambique restart
THE planned onshore facility designed to export Mozambique’s major gas discoveries attracted the biggest project financing yet seen in Africa. That was before Islamic State-linked militant attacks near the site in 2021 prompted Total to evacuate its personnel and declare force majeure.
The us Export-Import Bank, which committed the biggest share of US$4,7 billion in financing — and other lenders that comprise a total of about US$15 billion in debt — are conducting assessments on reactivating the funding, they said.
TotalEnergies chief executive officer Patrick Pouyanne said last month that the company has made progress with suppliers and contractors on achieving a mid-year restart. He had previously targeted the end of 2023.
“Exim continues to work with its financing partners and borrowers to conduct due diligence for the Mozambique LNG project in connection with proposed projects and restart amendments to the finance documents,” the US Eximbank said in a response to questions. It hasn’t made disbursements because of the force-majeure status.
The assessment of whether to resume financing coincides with a decision by the Biden administration in January to pause approval of new liquefied natural gas export licenses, in recognition that the climate impact from the fossil fuel needs to be reassessed. The US Eximbank’s loan to the Mozambique project was initially provided in 2020, during the administration of former President Donald Trump.
Exim said it seeks to align with Biden’s climate agenda “while still complying with Exim’s statutory requirements, including the charter prohibition against discrimination based solely on industry, sector or business, and its mission to support US jobs,” adding that any change to its charter requires congressional action.
While Russia’s invasion of Ukraine sent Europe on a scramble for alternative energy supplies that boosted interest in upcoming LNG production, projects in nations across Africa are still susceptible to a range of issues including political instability and construction delays. Mozambique has the added obstacle of an insurgency that’s become subdued by armed forces, though the Islamist fighters still carry out sporadic deadly raids.
A string of attacks since December has marked a resurgence in violence after Mozambican and regional forces last year announced major gains in the six-year conflict that’s left almost 5 000 people dead.