Campaigners have demanded the UK government pull its funding for a natural gas mega project in Mozambique – alleging that it breaches Britain’s human rights and environmental obligations.
The project in question is a $20 billion (£15bn) liquified natural gas (LNG) development located in the Cabo Delgado region of Mozambique. The project, called Mozambique LNG, has been halted since 2021 after violence from an Isis-backed group led to 183 contractors being trapped in a hotel for two days, with 10 people killed when apparently trying to escape, including British national Philip Mawer. In all, the ongoing insurgency in the area has resulted in an estimated 6,000 deaths since the conflict began in 2017, with some 600,000 people displaced.
In a letter seen by The Independent, campaign group Oil Change International (OCI) argues that the violence and other issues over the protection of the project makes a potential $1.15bn investment by UK Export Finance, a department of the UK government untenable. Continuing to finance the project is also not compatible with environmental commitments made in 2021 to no longer finance fossil fuels abroad, OCI argues.
A tale of violence, delay and legal action was never meant to be the story of Mozambique’s foray into natural gas, after some 180 trillion cubic feet of gas was discovered off the country’s coast in 2010. In 2016, the International Monetary Fund (IMF) projected 34 per cent GDP growth for Mozambique by 2021. However, actual economic growth was around 2.5 per cent.
TotalEnergies, the French energy firm, is currently in the process of trying to re-start the project by the middle of this year. “The security situation has improved,” CEO Patrick Pouyanne told Reuters on the sidelines of the World Gas conference earlier this month.
Pouyanne’s ambitions received a big boost in March when the US Export-Import Bank re-approved financial support worth $4.7bn for the project, boosting TotalEnergies’ hopes of restarting the project.
But the future of Mozambique LNG remains up in the air, with the British export credit agency still considering whether to recommit to its $1.15bn pledge – having joining with 33 countries, including the US, to sign a pledge to end public finance for fossil fuel projects abroad while hosting the COP26 climate summit in Glasgow in 2021.
According to OCI campaigner Adam McGibbon, if the UK pulls out of the deal then the entire financial arrangement is expected to collapse. “We know of at least one major bank involved in the deal that has said they will also pull out if the UK does,” he says.
The legal letter sent by OCI argues that the funding of the LNG project in Mozambique goes against the UK’s obligations under international law to promote human rights in business both domestically and abroad. The letter highlights the UN’s Guiding Principles on Business and Human Rights, which state that companies and nations must ensure that human rights are respected in relation to business operations.
A UK Export Finance spokesperson said: “UK Export Finance is currently in talks with project sponsors and other lenders regarding the latest status of the LNG production project in Mozambique.
“We take reports of alleged human rights infringement extremely seriously and are looking further into the matters.”
Observers at the time the gas was discovered off the coast of Mozambique suggested that the country – one of the world’s poorest – could transform into the “Qatar of Africa”. A number of massive projects aiming to ship the gas around the world in the form of LNG were soon proposed.
TotalEnergies’ Mozambique LNG project stands out for its sheer size, with the $20bn in financing a figure roughly the same size as Mozambique’s entire GDP. The 65 trillion cubic feet of gas it was expected to deliver is the equivalent of six years of current EU gas demand.
But in March 2021, the “force majeure” declaration was made, which enables parties to renege on an agreement due to unforeseen external circumstances. It came after Islamist insurgents captured swathes of territory in the Cabo Delgado region, and at least 1,400 people were left killed or missing presumed dead.
