Gas project funding faces environmental lawsuit

Environmental groups have filed a lawsuit accusing a US development bank of providing an ‘unlawful’ near-$5bn loan to a fossil fuel project in southern Africa, reports MSN. Friends of the Earth US, Mozambican environmental charity Justiça Ambiental and EarthRights International accuse the US Export-Import Bank (EXIM) – which uses US public money to support US investments abroad – of not conducting sufficient due diligence around the re-approval of the $4.6bn loan to a liquefied natural gas (LNG) project in Mozambique. In March, under President Donald Trump, EXIM announced the re-approval of the loan, which had been paused after the project ran into difficulties in 2021 related to an ongoing Islamic insurgency in the Cabo Delgado region where the project is based. The groups allege EXIM ‘rushed through approval’ without conducting required environmental reviews, economic assessment, or complying with the procedural requirements mandated by Congress. The long-delayed LNG project displaced thousands of local people. In 2021, French oil giant TotalEnergies, which is spearheading the project, was forced to halt operations after Islamist insurgents killed dozens of workers near the company’s main site in the Cabo Delgado region. The ongoing insurgency – and a force majeure declaration around the project – meant that TotalEnergies had been unable to resume operations

A spokesperson for Justiça Ambiental said: ‘To continue financing gas projects in Cabo Delgado would be a betrayal of Mozambique and humanity. It would ignore the voices of the families who are bearing the heaviest burdens – who have lost their land, access to the sea, and their livelihoods. 'It would show a lack of commitment to national laws, international standards, and any efforts to deal with the climate crisis.’ According to the Club of Mozambique, the 2010 discovery of vast offshore natural gas deposits in the Cabo Delgado province had raised hopes of Mozambique becoming an African version of wealthy Qatar. The African Development Bank estimated in 2018 the reserves at more than 5 000bn cubic metres of gas – enough to supply the UK, France, Germany and Italy for nearly 20 years. ‘The country’s vast gas reserves could make Mozambique a top 10 global producer, responsible for 20% of Africa’s output by 2040,’ according to a 2024 report by financial experts Deloitte.

Full report on the Club of Mozambique site

Full MSN report