What's Happening?
The Mozambique LNG project, led by TotalEnergies, is facing significant delays and increased costs due to global political shifts affecting international financing. The project, which has been in development
for several years, relies heavily on export credit agencies and foreign government support. In early 2025, the U.S. Export-Import Bank approved a nearly $5 billion loan to support the project's revival, indicating U.S. backing for major natural gas developments. However, the UK later withdrew its $1.15 billion financing commitment, citing security concerns and changes in climate policy. This withdrawal has reintroduced uncertainty into the project's financial structure and timeline, complicating Mozambique's efforts to restore momentum.
Why It's Important?
The situation with the Mozambique LNG project highlights the broader impact of international political and policy shifts on large-scale energy projects in Africa. The contrasting decisions by the U.S. and UK underscore the challenges faced by African governments and project developers, as project viability increasingly depends on political cycles and climate-policy debates in lending jurisdictions. The withdrawal of financing by a major participant can lead to increased project costs, extended timelines, and heightened risk perception among financiers. This uncertainty affects domestic planning, including future revenue projections and job creation expectations. The case of Mozambique LNG illustrates the need for more predictable long-term financing frameworks and stronger alignment between climate-policy objectives and development support.
What's Next?
To mitigate the impact of such political volatility, African governments and project developers are exploring alternative financing options, including multilateral institutions and capital providers in regions with more stable investment positions. There is a growing emphasis on developing regional financial instruments, multilateral guarantees, and African-led investment platforms to reduce reliance on single-jurisdiction decisions. The experience of Mozambique LNG underscores the importance of a stable international financing environment and stronger Africa-led coordination to sustain critical infrastructure development. Stakeholders are advocating for mechanisms that shield large-scale projects from abrupt shifts in foreign political agendas.
