French oil major, TotalEnergies, and its partners in the Mozambique LNG project are moving to raise fresh equity after key lenders pulled out of over $2.2 billion in financing.
The withdrawal came from export credit agencies UK Export Finance and Atradius Dutch State Business.
The development represents a major shift in the project’s funding plan.
It also introduces a new layer of uncertainty at a time when the company is preparing to resume activities in northern Mozambique.
Construction was suspended in 2021 after violent incidents in Cabo Delgado.
This forced TotalEnergies to declare force majeure and evacuate staff.
The company lifted the force majeure in late 2025.
It also announced that conditions in the region had improved.
This created room for engagement with lenders and government officials. TotalEnergies said the project was ready for a gradual restart once financing issues were resolved.
In response to the fresh funding gap, the operator confirmed that partners would supply additional equity.
The Mozambique LNG development is located in Area 1 of the Rovuma Basin.
It includes the Golfinho and Atum fields and two liquefaction trains with a combined output capacity of more than 13 million tonnes per year.
How the project began
The project secured about $15.4 billion in external financing in 2020.
This was supported by around 30 lenders. It was one of the largest financing deals ever completed in Africa’s energy sector.
Mozambique positioned the investment as a national growth driver. It expected significant export earnings once production started.
The operator saw the LNG hub as an anchor development in a region with large gas reserves.
The early years moved smoothly.
Construction ramped up and thousands of workers were deployed. This progress stalled in 2021 when insurgent attacks intensified. The security situation forced a complete halt.
Mozambique and regional forces later regained control of key areas.
Reconstruction and humanitarian programs followed. These improvements convinced TotalEnergies to reassess the situation and plan a return.
Why the lenders walked away
Moreover, UK Export Finance withdrew support after reassessing risks.
It said project conditions had changed since 2020. It raised concerns about security and the possibility of further disruptions. It also cited questions about value for UK taxpayers.
Similarly, Atradius withdrew for the reason.
Added to this, human rights reviews created additional pressure.
TotalEnergies later withdrew a request for a major insurance package. This resulted in most of the Dutch guarantee being cancelled.
The combined withdrawal from the UK and Dutch agencies created a new financing gap. The amount was about $2.2 billion.
Other setbacks and cost challenges
However, the financing issue is not the only setback.
The long period of inactivity increased project costs. TotalEnergies estimates that expenses rose by about $4.5 billion during the pause.
It requested a ten year extension to the production licence. The operator wanted the extension to reflect the years lost during the force majeure.
Mozambique rejected that request.
It ruled that the licence would only be extended by the exact period the project was frozen. The government also ordered an independent audit of the cost claims.
Only costs validated by the auditors will be eligible for future fiscal deductions.
The decision created a dispute over cost recovery. It also introduced another hurdle at a time when TotalEnergies is working to stabilise the project.
Why TotalEnergies is moving forward
Despite the challenges, TotalEnergies remains committed to the development.
The French oil major said most lenders have reconfirmed their support under revised financing terms. This covers about 90% of the original funding.
The remaining amount will be supplied as equity by the partners.
The company believes the project remains viable.
It also sees long term demand for LNG across Europe and Asia. Improved security conditions in Cabo Delgado strengthened the case for resuming work.
The Mozambique government recently asked TotalEnergies to submit a detailed restart timeline. This step is needed to approve full construction activities.
TotalEnergies said the revised equity plan ensures that work can continue even without UKEF and Atradius.
