Mozambique’s ECA backed multi-billion dollar gamble on LNG

(Climate Change News, London, 10 July 2020) A decade after prospectors struck gas off Cabo Delgado, northern Mozambique, a consortium led by Total is signing contracts worth $16 billion to exploit it. One of the biggest investments in Africa, the project to extract, liquefy and export gas raises the hope of catapulting Mozambique, one of the poorest countries in the world, to middle income status by the mid-2030s. But it is a gamble, coming as the coronavirus pandemic hits gas demand and economic growth worldwide. The bet can only pay off on a dangerously overheated planet. High rollers from around the world are backing France's Total, including would-be climate champions. The UK is reportedly supporting the project through its export credit agency, even as it urges leaders to bring more ambitious climate pledges to the Cop26 summit it hosts next year. ECAs participating in the financing include the US EXIM (US$4.7B), JBIC (US$3B), NEXI, UKEF (US$1.15B), SACE, South Africa's ECIC, Atradius and EXIM Thailand. In addition 19 commercial banks and the African Development Bank (AfDB) have committed support. ECAs typically link lending to domestic benefits - the US’ EXIM Bank provided $4.7 billion, which it said would support 16,700 jobs in the US over five years. The UKEF lending said its financing would provide more than 2,000 jobs in the UK and sustain a number of businesses. Global Witness’ senior climate campaigner Adam McGibbon said the UK government’s support for fossil fuels overseas, while claiming to take action on the environment, “is nothing but climate hypocrisy. "It makes a mockery of the idea of the UK as a climate leader,” said Friends of the Earth. According to The Times UK Prime minister Boris Johnson was reported as being “pretty furious”, adding that business secretary Alok Sharma and foreign secretary Dominic Raab have criticised the UKEF lending. The newspaper cited concerns that UKEF was operating without “proper ministerial oversight”.