The US has approved a $4.7 billion loan for a Mozambique LNG project criticized as a ‘carbon bomb.’ This funding, despite prior commitments to reduce fossil fuel financing, aims to support TotalEnergies amid serious allegations of human rights abuses connected to the project. The future of other countries’ support for the initiative is under review, reflecting ongoing debates in climate policy and financial responsibility.
The United States has approved a $4.7 billion loan for a liquefied natural gas (LNG) project in Mozambique, which has faced criticism as a “carbon bomb” and is linked to allegations of human rights abuses. The financing, provided by the US Export-Import Bank (EXIM), aims to support the project led by French energy company TotalEnergies, primarily located in the Cabo Delgado region of Mozambique. This approval has not yet been confirmed publicly by EXIM, but reports indicate its significance for unlocking further financing for a project estimated to cost $20 billion in total.
The financing decision signifies a reversal from a potential ban on public funding for international oil and gas projects that wealthy nations, including the US, were considering at the end of the previous year. Importantly, this loan allows TotalEnergies to restart construction, which had been paused due to a 2021 attack by the Al-Shabaab militant group, claiming the lives of numerous civilians.
TotalEnergies faces scrutiny as French authorities launched an investigation into potential involuntary manslaughter claims against the firm for its safety measures following the militants’ attack. Allegations have surfaced regarding the involvement of Mozambican soldiers in serious human rights violations, which the company denies, asserting that it had no knowledge of those events.
Despite hopes to resume construction in 2024, TotalEnergies has indicated a likely delay until at least 2029 due to ongoing security and financial uncertainties. CEO Patrick Pouyanné had sought US governmental support for the project and noted that many contracts are awarded to US firms, positioning them as a pivotal factor in the project’s backing.
Climate advocates have criticized the Mozambique LNG initiative, emphasizing its potential to produce significant carbon emissions annually and jeopardizing global climate goals. Additionally, critics have denounced the expenditure of taxpayer funds on fossil fuel developments linked to human rights violations. Reports indicate that other countries, such as the UK and the Netherlands, are reassessing their financial commitments to the project amid ongoing scrutiny.
The US EXIM Bank had previously approved financing under the Trump administration, but the need for renewed approval arose after contract issues with TotalEnergies. Despite past commitments, total cancellations of international aid programs have occurred under the Trump administration, raising concerns regarding priorities in foreign aid allocation. The dynamics around international financing continued to shift after the participation of the US in climate pledges at the COP26 summit, aimed at moving away from financing fossil fuel projects abroad. Overall, the geopolitical landscape remains complex following recent discussions on export credit support for oil and gas abroad, with forthcoming negotiations indicating uncertain futures for such projects.
The article conveys that the US has granted a $4.7 billion loan to a Mozambique LNG project, raising ethical concerns over human rights abuses and environmental impacts. This decision marks a shift from previous global commitments against public funding for fossil fuels. As TotalEnergies navigates construction delays and ongoing investigations, critics argue that this financing represents a misuse of taxpayer dollars and exacerbates climate challenges. The discussions around international financial commitments from other countries remain ongoing as they evaluate their support for the project.
Original Source: www.climatechangenews.com
