TotalEnergies SE is awaiting a decision regarding a $4.7 billion loan from the US Export-Import Bank for its halted Mozambique LNG project. The loan, initially approved in 2019, faces new review due to delays from security concerns. Optimism surrounds the project as recent appointments by President Trump seek to empower Exim. The approval would be a critical step in resuming the project that promises economic benefits for Mozambique.
TotalEnergies SE is set to receive a crucial decision from the US Export-Import Bank regarding its $4.7 billion loan for the $20 billion liquefied natural gas project in Mozambique. The project’s construction was previously halted four years ago due to security concerns from attacks linked to Islamic State militants. Fresh approvals for the financing are necessary due to these significant delays.
The financing agreement initially secured in 2019 under the Trump administration has now necessitated new approvals after several years. Recent appointments to the Exim board by President Trump are aimed at bolstering US energy dominance while supporting jobs in the oil and gas sector. Notably, two senior officials have been appointed to facilitate greater decision-making capacity within the bank.
A key item on Exim’s forthcoming March 13 agenda involves amending finance documents for the Mozambique LNG project, which includes setting a new completion date of 2030. TotalEnergies’ CEO, Patrick Pouyanne, expressed optimism regarding the situation, stating that the bank’s newly operational status under Trump’s appointments will lead to success in securing the necessary financing.
Receiving the approval for this financing will be pivotal in restarting the Mozambique LNG project, which has seen TotalEnergies invest billions thus far. The success of this endeavor is crucial for the economic development of Mozambique, a nation eager for the benefits promised by the project. However, loan approvals are still awaited from UK and Dutch export credit agencies.
With the recent establishment of a board quorum at Exim, the bank is reviewing the changes to the financing terms of the Mozambique LNG project. TotalEnergies previously struggled to obtain renewed loan approval during the Biden administration and engaged a Washington lobbyist to assist in the matter.
As Pouyanne mentioned, a significant proportion of the contracts awarded have gone to American companies, underscoring the US’s involvement in this endeavor. However, safety assurances for returning workers are paramount, given the project’s four-year force majeure. Preparations for the project faced setbacks, including the cancellation of a supply contract as attempts to resume operations encountered challenges.
In conclusion, TotalEnergies is awaiting a pivotal decision from the US Export-Import Bank on crucial financing that could restart its Mozambique LNG project. With past delays attributed to security issues, and recent moves by President Trump to strengthen Exim’s board, optimism remains that the necessary approvals will be granted. This development could catalyze economic transformation in Mozambique while reaffirming the significant role of American contractors in the project.
Original Source: financialpost.com
