The United Kingdom has withdrawn its financial backing for TotalEnergies’ halted liquefied natural gas (LNG) project in Mozambique, ending plans to provide up to $1.15 billion in government-supported funding.
The decision follows renewed controversy surrounding the $20 billion project, which was suspended in 2021 after jihadist militants launched a deadly attack in Cabo Delgado, killing an estimated 800 people. Although TotalEnergies announced in October that it would lift the force majeure imposed after the violence, the UK government now says continued involvement would not serve Britain’s national interest.
Business Secretary Peter Kyle confirmed the withdrawal on Monday.
“Whilst these decisions are never easy, the government believes that UK financing of this project will not advance the interests of our country,” he said.
UK Export Finance (UKEF), the government’s export credit agency, has formally halted its participation in the financing structure, despite earlier expectations that British involvement would boost UK exporters linked to the LNG supply chain.
TotalEnergies, which holds a 26.5 per cent stake in the venture, is seeking $4.5 billion in compensation for cost overruns from the Mozambican government. The company hopes to resume production by 2029, subject to approval of its revised budget plans by authorities in Maputo.
Despite ending support for the LNG scheme, the UK government says it will continue to strengthen economic relations with Mozambique and other African partners.
“We remain committed to backing British exporters… and to building long-term respectful relationships with African countries to boost sustainable growth, tackle the climate crisis and address insecurity,” Kyle added.
The gas-rich Cabo Delgado region has become a focal point for international investment, hosting major projects led by TotalEnergies, Italy’s ENI, and US oil giant ExxonMobil. According to a 2024 Deloitte report, the developments could propel Mozambique into the world’s top ten gas producers, accounting for up to 20 per cent of Africa’s natural gas output by 2040.
However, the projects have also drawn strong criticism. Mozambican and international civil society groups have accused TotalEnergies of placing the country “under economic duress” by demanding what they describe as “ultra-favourable conditions” before restarting operations. Environmental organisations have likewise condemned the project as a “climate bomb” with limited benefits for ordinary Mozambicans—more than 80 per cent of whom lived below the $3-a-day poverty line in 2022, according to the World Bank.
With the UK’s withdrawal, the future of the long-delayed project now hinges on Mozambique’s ability to meet the financial and security demands of its multinational partners.
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