UK Withdraws $1.15 Billion from Mozambique LNG, Signaling a Strategic Shift in Energy Finance
Primary source: Britain withdraws R19.65bn backing from TotalEnergies-led Mozambique LNG via Reuters.
In a significant blow to one of Africa’s largest energy projects, the United Kingdom has formally withdrawn its $1.15 billion (R19.64 billion) financial backing for the TotalEnergies-led Mozambique LNG development. The decision, announced by British Business Minister Peter Kyle, marks a pivotal moment for the $20 billion venture, which aims to transform Mozambique into a global gas exporter.
A Decision Rooted in Escalating Risk
The UK’s support, pledged in 2020 through its export credit agency, UK Export Finance (UKEF), comprised a $300 million loan and approximately $700 million in insurance. This commitment was made just before the UK’s public pledge to end direct government support for overseas fossil fuel projects. According to Minister Kyle, the decision to withdraw followed a proposal to amend the original financing terms as the project prepared to restart.
“My officials have evaluated the risks around the project, and it is the view of His Majesty’s government that these risks have increased since 2020,” Kyle stated. He emphasized that the assessment, which considered the interests of UK taxpayers, concluded that ending participation was the prudent course.
Security, Finance, and Human Rights: A Converging Storm
The UK’s risk assessment likely weighed several compounding factors. The project has been suspended since 2021 due to a deadly Islamist insurgency in the Cabo Delgado province. While TotalEnergies lifted its force majeure declaration in late 2024, resurgent jihadist attacks have forced the company to transport workers and equipment by air and sea for security, adding substantial cost and logistical complexity.
Furthermore, the project faces financial and legal headwinds. In April 2025, TotalEnergies CEO Patrick Pouyanne told investors that partners could proceed using equity if necessary, suggesting contingency planning was underway. Simultaneously, the project is under a human rights spotlight. A criminal complaint filed by the nonprofit ECCHR alleges TotalEnergies’ complicity in abuses by Mozambican security forces—allegations the company strongly denies. UKEF had reportedly hired a law firm to investigate these risks following media reports.
The Geopolitical Financing Puzzle
The UK’s exit creates a fragmented international financing picture for Mozambique LNG. While the U.S. Export-Import Bank approved a nearly $5 billion loan in March 2025, the Dutch export credit agency Atradius, which pledged around $1 billion in insurance, stated in July that an independent human rights review was ongoing with “no clearly defined deadline.” This leaves the project’s Western public finance support in a state of uncertainty, potentially shifting greater burden to shareholder equity and other private financiers.
Analysis: What the UK Withdrawal Really Means
This move is more than a project-specific decision; it is a bellwether for the future of major fossil fuel infrastructure finance. It underscores how non-financial risks—particularly security and human rights—are becoming decisive factors for Western governments and their credit agencies, even for strategically significant energy projects.
For Mozambique, the withdrawal is a stark reminder of the vulnerability of its economic ambitions to external risk assessments. The nation is counting on LNG revenues to drive development, but international capital remains skittish.
For TotalEnergies and its consortium partners—including Mitsui, Mozambique’s ENH, and India’s ONGC—the challenge is now twofold: securing the remaining financing while managing a high-risk operating environment. The company maintains that over 70% of project financing is secured and 90% of future production is under contract, suggesting foundational commercial viability remains. However, the loss of UK backing is a significant reputational and financial setback that may influence other stakeholders.
The UK’s withdrawal, prioritizing taxpayer risk and aligned with its climate commitments, may encourage similar caution from other European financiers, setting a new precedent for the due diligence required for mega-projects in complex environments.