UK torpedoes Mozambique’s Cabo Delgado LNG project as it pulls back from USD 1.15 billion commitment

December 3, 2025 in Business, Energy, Finance, Hydrocarbons, Investment by Editor

The UK’s surprise withdrawal of USD 1.15 billion in support for the Mozambique LNG project has reignited concerns over whether Africa’s energy ambitions can withstand shifting Western climate politics. As Mozambique aims to convert its gas reserves into long-term economic gains, London’s reversal highlights deeper tensions around energy security, development financing and the continent’s quest for greater sovereignty in its transition strategies.

The UK government’s withdrawal of USD 1.15 billion in export-credit support for the Mozambique LNG project has reopened a familiar but unresolved debate: whether Africa’s energy ambitions can survive shifting Western climate politics. Announced this week, the move removes one of the largest public-finance guarantees behind the TotalEnergies-led development—an abrupt reversal that complicates financing plans just as the project was regaining momentum.

For Mozambique, the LNG project is not just a hydrocarbon investment. It is central to a long-term national strategy to expand fiscal space, industrial capacity and employment. With a projected output of 13 million tonnes of LNG annually, the project has been positioned as a rare opportunity for the country to convert significant gas reserves into revenue flows that can support public services and diversify the economy. Neighbouring countries have viewed it as a regional anchor for energy security and industrialisation.

Those expectations stalled after the 2021 insurgency in Cabo Delgado forced a freeze on construction. But improvements in the security environment—followed by TotalEnergies’ decision earlier this year to lift force majeure—had revived investor confidence. The US Export–Import Bank reapproved its loan in mid-2025, signalling support for a recalibrated development plan now under review by Mozambican authorities. Against this backdrop, the UK exit is striking.

UK Export Finance cited risk concerns, but the decision aligns with a broader shift within Western institutions, where public financing for fossil-fuel projects is increasingly constrained by domestic political pressure. For African governments, such moves revive longstanding concerns: development-critical infrastructure is often influenced by political debates unfolding thousands of kilometres away, with little accountability to the countries most affected.

Energy analysts say the UK decision underscores a widening policy gap. African states stress energy access, predictable baseload power and job creation—requirements that remain difficult to meet exclusively through emerging renewable systems. Western governments, meanwhile, face expectations to limit support for hydrocarbons irrespective of local development needs. The collision of these priorities shapes a financing environment that is both unpredictable and increasingly political.

The African Energy Chamber criticised the UK move, arguing that it threatens regional energy security and weakens efforts to reduce reliance on expensive fuel imports. But beyond the rhetoric, the structural issue is more complex: Africa’s largest energy projects still depend heavily on external capital whose availability fluctuates with political cycles abroad.

Mozambique LNG illustrates the stakes. The project is expected to create thousands of direct and indirect jobs in Cabo Delgado, where local content programmes and SME development are already taking shape. Government revenue from the gas sector has risen steadily—over 20pclast year—demonstrating the fiscal significance of sustained development. Delays now risk slowing this momentum, narrowing growth prospects at a moment when Mozambique is trying to consolidate post-conflict recovery and expand productive capacity.

For Africa, the UK decision raises a larger strategic question: how to build an energy-financing architecture that reflects its own priorities rather than external agendas. Regional investment tools, sovereign partnerships and financiers less exposed to political volatility will need to play a greater role if the continent is to secure long-term energy sovereignty.

Mozambique LNG remains a project of both promise and fragility—emblematic of how global climate politics, development needs and security realities intersect on the continent. The central question now is not whether LNG fits into Africa’s energy future, but whether the continent will retain agency over the terms of its own transition.