Environmental lobby groups have sent a letter urging banks and other financiers to withdraw their support for TotalEnergies’ $20 billion liquefied natural gas (LNG) terminal in Mozambique.
The letter, sent to over two dozen project funders, coincides with a crucial moment for the French energy company as it readies to resume Africa’s largest foreign direct investment project.
Activists caution that the project may exacerbate climate change and contribute to human rights abuses in the impoverished southern African nation.
“As a critical financial supporter of the project, you bear a direct and important responsibility in its dreadful impacts,” the letter, supported by more than 100 organizations, including ActionAid International and Greenpeace France, said.
According to Reuters, last month, Dutch lawmakers announced their insistence on being consulted regarding safety and human rights concerns before approving a 1 billion euro ($1.06 billion) loan guarantee for the project, which has been stalled since April 2021.
Applauding the Dutch decision as a significant signal, Lorette Philippot, private finance campaigner with Friends of the Earth France, said activists are “hopeful that other financiers will conduct proper assessments and withdraw from this time bomb project,”
TotalEnergies stated that the arrangements remained unchanged from their previous statements, emphasizing that project finance remains in place despite a ‘force majeure’ halt in 2021 when Islamist militants posed threats to the project site.
Currently, around $15 billion in financing is under review as part of the restart procedures, according to a credit official familiar with the ongoing negotiations.
South Africa’s Export Credit Insurance Corporation is planning to seek board approval early next year to support the project, as mentioned by acting CEO Ntshengedzeni Maphula.
The delay in the project has prompted some investors to reassess their previous cost assumptions in response to inflation and fluctuations in the global gas market.
The U.S. Exim bank, responsible for guaranteeing $5 billion, has stated that it is currently conducting due diligence on plans to resume construction.
