French oil major TotalEnergies and its partners on the $20 billion Mozambique LNG project have agreed to provide additional equity to replace contributions from British and Dutch export credit agencies, marking a critical financial restructuring for the delayed megaproject. The move comes as the project aims for a 2029 production start despite ongoing security and human rights controversies.
The UK and Dutch agencies previously represented about 10% of the $15.4 billion in external financing initially secured for the project. On Monday, Britain’s government announced it would rescind $1.15 billion in loans and export insurance, citing excessive risk. The Dutch government revealed that TotalEnergies had opted to cancel an insurance request with Atradius, its export credit arm, just as the Netherlands was finalizing a decision on potential withdrawal based on an independent human rights review.
TotalEnergies said that following the lifting of force majeure on the project last month, partners chose to proceed without support from Atradius and UK Export Finance, the only agencies that had yet to reconfirm financing. Financing agreements with remaining lenders have been amended to reflect the four-year construction freeze and revised project schedule.
The TotalEnergies-led 13 million metric tons per year liquefied natural gas project will transform Mozambique into a major gas exporter when operational. However, jihadist attacks in the region forced a construction freeze from 2021 while government soldiers worked to suppress the insurgency, with their methods often criticized by nonprofit observers.
Regarding the Dutch-commissioned human rights review, which found allegations of civilian torture by government soldiers near the project site to be credible, TotalEnergies stated the report was produced using information gathered by third parties rather than on-the-ground investigation.
The Mozambique LNG partners include TotalEnergies holding 26.5%, Japan’s Mitsui at 20%, Mozambique’s state-owned ENH at 15%, Bharat Petroleum at 10%, Oil India at 10%, ONGC Videsh at 10%, and Thailand’s PTTEP at 8.5%.
Source: cnbcafrica.com