TotalEnergies Clarifies Financing Shift for Mozambique LNG Project

TotalEnergies has moved to clarify the financing structure behind the long-delayed Mozambique LNG development after the UK and Dutch governments disclosed that their export credit agencies would no longer participate in the project’s debt package. The company said the consortium has unanimously agreed to inject additional equity to replace the withdrawn commitments, representing roughly 10% of the project’s external financing.

The liquefaction project — one of Africa’s biggest LNG developments — secured a landmark $15.4 billion financing package in 2020 from around 30 lenders, including multiple export credit agencies (ECAs). However, the Islamist insurgency in Cabo Delgado triggered a prolonged force majeure declaration in 2021, halting construction and prompting a broad renegotiation of financing terms.

Following the recent lifting of force majeure and the partners’ decision to restart the project, TotalEnergies said it amended the financing agreement to reflect the updated timeline. UKEF and Atradius, however, had not reconfirmed their participation. As a result, the partners opted to proceed without the two ECAs.

TotalEnergies stressed that the remaining lenders — roughly 90% of the original financing group — have reaffirmed their commitment. The company framed the renewed support as a vote of confidence in the project’s contribution to Mozambique’s economic development at a time when LNG demand remains robust and global buyers seek diversified long-term supply.

The company also responded to Dutch government–commissioned reports on human rights and security conditions in Cabo Delgado, criticizing advisors Clingendael and Pangea Risk for not conducting on-the-ground assessments. TotalEnergies reiterated its previous statements addressing human-rights allegations involving Mozambican forces and directed stakeholders to further clarifications issued in November.

The clarification underscores the consortium’s determination to restart work on the strategically significant LNG plant, which is expected to transform Mozambique into a major global gas exporter once operational. While the withdrawal of UK and Dutch ECA backing removes a layer of political-risk insurance, the partners’ decision to fill the gap with equity signals confidence in both project economics and regional security improvements.

By Charles Kennedy for Oilprice.com

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