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TotalEnergies failed to convince the Biden administration to unblock almost $5bn in loans for its controversial Mozambique Liquefied Natural Gas project before it left office, as one of Africa’s largest energy investments faces paralysis.
In letters sent in December, the oil group’s chief executive Patrick Pouyanné urged Biden’s secretary of state Antony Blinken, national security adviser Jake Sullivan and secretary of commerce Gina Raimondo to help approve financing for the $20bn LNG development by January 20 — the day of Donald Trump’s inauguration as US president.
Pouyanné said in the letters disclosed in US filings that he was concerned that the transition to the Trump administration would lead to “additional and lengthy delays” that could “undermine the financing structure, already in place and approved, and bring the entire project to a stop”.
The US Export-Import Bank (EXIM) confirmed to the Financial Times that its board had not signed off on the project before Pouyanné’s deadline.
“The incoming leadership of EXIM is conducting a fresh review of proposed changes to the terms of financing of its ongoing Mozambique LNG project, and all other proposed energy transactions,” it said.
The project became the largest foreign direct investment project in Africa when financing was secured in 2020, with the backing of the US, UK and other governments for the TotalEnergies-led production.
But in 2021, the French group activated a contractual pause known as “force majeure” after Islamist insurgents killed dozens of workers near the company site in Mozambique’s northern Cabo Delgado province.
Insecurity in the region has prevented its resumption since. The project’s potential environmental impact and reports of human rights abuses have added to the controversy surrounding the investment.
Documents obtained by Le Monde and Italian NGO ReCommon show that TotalEnergies was aware in 2021 of allegations of human rights abuses by Mozambican soldiers charged with protecting the site.
Total told Le Monde the project had implemented a “grievance mechanism” to “address reported human rights abuses” and ensure they were investigated by authorities.
The FT reported last week that the company had failed to meet an ambition of restarting work by the end of 2024, potentially jeopardising a 2029 production date. The company said it was waiting for security conditions to improve in the region.
Pouyanné was also unable to make a planned trip to Mozambique in October, after contested elections sparked violent protests and a brutal police crackdown.
On Monday, he met Daniel Chapo, inaugurated as president in January, at an energy conference in Dar es Salaam for the first time since his election, when the TotalEnergies boss reaffirmed his efforts to restart the project, Chapo said on X.
But the correspondence from Pouyanné shows concerns over delays because of financing. During the first Trump presidency, the US committed $4.7bn to the project in export credit but this loan was put on hold after the announcement of force majeure.
In a sign of the company’s urgency to receive approval for the loan, it enlisted consultancy Primus Responsum to lobby EXIM to secure financing, offering a $250,000 bonus if the organisation could successfully confirm the project by January 20, Bloomberg reported last week. Nicolas Lloreda, the consultancy’s director, declined to comment.
The British and Dutch governments are also reviewing funding plans.
UK Export Finance, the government’s export credit agency, said: “We are currently in talks with project sponsors and other lenders regarding the latest status of the LNG production project in Mozambique and the potential for the force majeure situation to lift.”
The British had previously agreed $1.15bn in financial support.
The Netherlands is reassessing its commitment of about €1bn in export credit insurance, the country’s credit agency Atradius confirmed.
Other governments involved, including Japan and Italy, have agreed to finance the project.
While the US support was the largest part of the debt financing package, the project’s requests had to be “approved unanimously” for disbursements to resume, Italian business minister Fausta Bergamotto said last week.
TotalEnergies declined to comment.
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