Pressure Mounts on Funders of TotalEnergies’ Mozambique LNG Project Amid Environmental and Human Rights Concerns

In an unprecedented push by environmental advocates, over two dozen banks and financial institutions have been urged to reconsider their support for TotalEnergies' $20 billion liquefied natural gas (LNG) project in Mozambique. This call for action was encapsulated in a forceful letter penned by a collective of more than 100 organizations, highlighting serious environmental and human rights implications associated with the impact of the project.

The letter, brought to light by Reuters, puts significant pressure on TotalEnergies at a critical moment as the company seeks to reinstate what is considered the largest foreign direct investment in Africa. The project, which has been stalled since the uprising of Islamist militants in April 2021, risks contributing to climate change and perpetuating human rights violations in the already vulnerable Southern African country.

These activists have not minced their words, claiming that the financiers are directly responsible for the "dreadful impacts" that may arise from the continuance of this LNG terminal. Signatories, including heavyweight campaigners such as ActionAid International and Greenpeace France, are asserting a direct link between financial support and corporate accountability.

The funding for this sizeable infrastructure project, which was solidified in 2020, saw the involvement of eight export credit agencies, 19 commercial banks, and contributions from the African Development Bank (AfDB). With approximately $15 billion of this financing under review as TotalEnergies readies for project resumption, the letter has thrown a proverbial wrench in the proceedings.

The Export Credit Insurance Corporation of South Africa, according to its acting CEO Ntshengedzeni Maphula, planned to secure board approval to sustain its backing of the initiative in the upcoming year. However, this recent development and the letter calling out financiers on ethical grounds could potentially influence the fate of their involvement.

This is no small matter, as evidenced by the action of Dutch legislators last month, who have demanded a comprehensive consultation focusing on safety and human rights before approving a proposed €1bn loan guarantee. The need for redress is emphasized by the escalating cost concerns, inflationary impacts, and the volatile global gas market.

Further complicating matters, the US Export-Import Bank, guarantor of a $5bn chunk of the project's finance, has expressed a commitment to thorough due diligence as plans to kick-start construction are reevaluated. Reta Jo Lewis, the president of the bank, indicated that any changes to the financing's terms would be subject to rigorous review.

What is clear from these collective voices is a growing consciousness around fossil fuel investments and their broader societal implications. Stakeholders are now being called upon to weigh not just the financial returns but also the potential for adverse climate impacts and abetting human rights abuses.