Mozambique: a $5 billion US loan boosts TotalEnergies' gas megaproject

TotalEnergies' $20 billion liquefied natural gas (LNG) project in Mozambique has received a major boost with the approval of a $5 billion loan from the US Export-Import Bank (Exim). This funding, which comes after years of suspension due to insecurity in the Cabo Delgado region, marks a key step towards the resumption of this strategic project, while raising questions about the persistent risks and human impacts.

Launched by TotalEnergies, which holds a 26.5% operating interest, the Mozambique LNG project was frozen in 2021 following a series of violent attacks by insurgents affiliated to the Islamic State in the province of Cabo Delgado. The assault on Palma in March 2021 resulted in massacres, beheadings and the displacement of tens of thousands of people, forcing TotalEnergies to declare force majeure and suspend operations. This $5 billion loan, initially approved under the Trump administration but delayed by political transitions in the United States, offers a breath of fresh air to restart work.

TotalEnergies CEO Patrick Pouyanné had anticipated this approval in a statement in February 2025, hoping that other credit agencies, notably British and Dutch, would follow suit in the coming months. "TotalEnergies will cooperate fully with any investigation into this project," the company said in a statement, responding to concerns raised by NGOs and foreign governments.

Despite this funding, the security situation remains precarious. Extremist attacks continue to threaten northern Mozambique, where the project is located. Seb Kennedy, analyst at Energy Flux, points out that "although the project has not directly caused counter-insurgency violence, it has been a catalyst for it". He cautions against over-optimism, pointing out that "the reality of operating in a conflict-prone region can quickly compromise LNG mega-projects".

The UK government is even considering withdrawing its support because of the "volatile situation", according to the Financial Times, while the Netherlands has launched an independent investigation into human rights abuses by Mozambican security forces. These concerns echo complaints filed in 2023 by subcontractors and families of victims of the Palma massacre, who accused TotalEnergies of negligence, accusations that the company has firmly rejected.

The Mozambique LNG project aims to exploit the vast offshore gas reserves of the Rovuma Basin, with an initial capacity of 13.1 million tonnes per year, expandable to 43 million. It promises to transform the Mozambican economy by making the country a major LNG exporter, while meeting regional energy demand. However, critics such as Daniel Ribiero of Friends of the Earth Mozambique believe that "human rights abuses, armed conflict and environmental impacts should have deterred responsible investors".

For Mozambique, this financing represents an opportunity to relaunch a key sector after years of economic disruption due to insecurity. But the resumption of work will depend on the government's ability to stabilise Cabo Delgado, where the forces of law and order are struggling to contain the insurgency. The international community, while supporting the project, is calling for increased vigilance to prevent local tensions from escalating.

As TotalEnergies prepares to lift the force majeure and restart operations, Mozambique LNG illustrates the complex challenges of investing in conflict zones. Between economic promises and security realities, this gas megaproject remains at a crossroads.