US Exim Approves $4.7 Billion Loan for Mozambique LNG Project

The US Export-Import Bank approved a $4.7 billion loan for TotalEnergies’ Mozambique LNG project, marking the largest component of its financing. The project has been stalled for four years due to security issues. Despite improved conditions, concerns remain among environmental groups over the funding amidst cuts to foreign aid. Over 40% of contracts have gone to US companies.

On March 14, 2025, the US Export-Import Bank’s board sanctioned a significant loan of $4.7 billion, constituting the largest financing segment for the TotalEnergies SE Mozambique LNG project. This project is pivotal for the liquefaction and exportation of natural gas from Mozambique, which had been stalled for four years due to militant activities linked to the Islamic State.

The resumption of construction requires the establishment of safe working conditions for employees returning to the site, as well as the revival of previous financial commitments from export credit agencies. These actions are fundamental for restarting the halted project.

The approval by the US Export-Import Bank’s board was initially reported by the Financial Times, citing Mozambique’s Energy Minister, Estevão Pale. Despite attempts by TotalEnergies to secure renewed loan approval from the Biden administration prior to January, those efforts were unsuccessful. The financing confirmation follows several recent appointments to the bank made by the Trump administration.

In relation to this financial approval, Mozambique’s eurobonds, maturing in 2031, experienced a notable rise of 3% on Friday, marking the highest daily gain since January 17. However, the decision to fund a project under conflict drew criticism from environmental groups, particularly amid cuts in US foreign health support.

Kate DeAngelis, Deputy Director of Economic Policy at Friends of the Earth US, remarked on the contrasting priorities of the administration, stating, “As the Trump Administration eliminates taxpayer-funded foreign aid… it is giving an almost $5 billion handout to the fossil fuel industry.”

Currently, over 40% of the contracts awarded for the Mozambique LNG project have been allocated to US companies, as shared by TotalEnergies’ CEO, Patrick Pouyanne. He noted improvements in the security situation surrounding the construction site but acknowledged that the conditions would likely never reach a level of perfection.

In conclusion, the US Export-Import Bank’s approval of a $4.7 billion loan for TotalEnergies’ Mozambique LNG project represents a significant financial move that aims to revive economic activities in the region following years of halt caused by instability. While the financial affirmation brings hope for the project, it faces scrutiny due to environmental concerns and potential conflicts of interest regarding funding priorities. Overall, the situation underscores the delicate balance between energy development and social responsibility.

Original Source: financialpost.com