Total ECA Funders Weigh Mozambique Restart After 3 Year Halt

(Bloomberg, 1 March 2024) Lenders to TotalEnergies SE’s Mozambique liquefied natural gas project are weighing the release of billions of dollars in funding as the company plans to resume construction three years after development was halted by Islamist insurgent attacks. The planned onshore facility designed to export the southern African nation’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 $4.7 billion in financing — and other lenders that comprise a total of about $15 billion in debt — are conducting assessments on reactivating the funding. 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. 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. Atradius Dutch State Business, the Amsterdam-based Dutch export-credit agency that’s committed $1 billion to Mozambique LNG, said it’s also assessing the situation. “Due diligence is currently ongoing to assess whether we can allow drawdowns under the loan,” it said.