TotalEnergies and its partners in the Mozambique LNG project are set to provide additional equity to replace the previous funding from British and Dutch agencies, representing around 10% of the total external financing.
This follows the withdrawal of Britain’s UK Export Finance (UKEF) and the Netherlands’ export credit agency Atradius, which together had supported the project with $2.2bn, reported Reuters.
According to TotalEnergies, the liquefied natural gas (LNG) project received $15.4bn (€13.22bn) in financing in 2020 from a group of lenders including export credit agencies and commercial banks.
However, the project construction was halted in April 2021 due to security incidents in the region.
After the lifting of force majeure last month, the project partners chose to resume the project without UKEF and Atradius, as the agencies had not reconfirmed their support.
The UK Government announced it would withdraw $1.15bn (£868.53m) in loans and export insurance to the project, citing the project’s risk.
Additionally, the Dutch Government said TotalEnergies cancelled an insurance request with Atradius while the Netherlands reviewed a human rights report.
The Mozambique LNG project is set to produce 13 million tonnes per annum (mtpa) of LNG, with operations scheduled to begin in 2029.
Financing agreements with the remaining lenders have been amended to reflect the updated project schedule after a prolonged halt, said the French oil major.
Furthermore, TotalEnergies acknowledged reports commissioned by the Dutch Ministry of Finance from external advisors Clingendael and Pangea Risk, assessing human rights and security in Cabo Delgado.
The company said: “TotalEnergies regrets that both external advisors did not travel to Mozambique and conduct on-the-ground investigations by themselves but produced a report relying mainly on information collected through third parties.”
In October this year, TotalEnergies sought approval from the Mozambican Government for a $4.5bn increase in the costs of the LNG project.
