High Court hearings began in the UK this week on a legal challenge brought by Friends of the Earth (FoE) against the British government providing over $1.15 billion in financing for TotalEnergies' Mozambique LNG project.
The UK Export Finance (UKEF) - sanctioned by the Treasury Department - aims to provide up to $1.15 billion of direct loans and guarantees to banks to support the $20 billion liquefied natural gas project in Cabo Delgado, northern Mozambique.
Gas from the Golfinho-Atum fields in Offshore Area 1 will be fed to a two-train LNG plant to be built on the coast.
FoE wants a judicial review of the loan, claiming a proper assessment of the project's climate impact has not been carried out and that the financial support contradicts the UK's obligation to help other countries meet their own climate targets.
The hearings are due to conclude on 9 December.
Rachel Kennerley, international climate campaigner at FoE, said: "In the few weeks between the end of the UN climate talks and this legal hearing, ministers have pledged they’ll press other countries to meet their climate targets.
"But in propping up this massively destructive development, the government hampers not only the UK’s own chances of curbing climate breakdown, but also global targets to confront it, while pushing Mozambique to the brink of climate disaster."
“By ending its support for all fossil fuels, including gas, the (UK) government can be known for something other than climate hypocrisy.”
Anabela Lemos, director of Justica Ambiental - also known as FoE Mozambique - claimed that if the court allows UKEF to finance the Mozambique gas industry, "then the country will be complicit in human rights violations, displacement of communities, climate destruction and the fuelling of a devastating conflict."
Leigh Day solicitor Rowan Smith, who represents FoE, argued that “policy makers are now clear: any new investment in fossil fuel extraction is inconsistent with the low emissions pathway under the Paris Agreement."
"This project was never compatible with the Paris Agreement on the basis of the evidence taken into account, and the UK was not – our clients will argue – legally permitted to conclude otherwise."
"We remain confident that UK Export Finance follows robust and internationally recognised due diligence before providing any support for overseas projects," a British government spokesperson told Reuters, adding: "We do not comment on ongoing legal proceedings".
A TotalEnergies spokesperson told the news agency that: "TotalEnergies EP Mozambique Area 1 Limitada and Moz LNG1 Financing Company Limited are supporting the UK government‘s decision to finance this project, and are not in the position to comment on a pending judicial case, where they are not the Defendant."
The French supermajor declared force majeure on the project earlier this year after Islamist insurgents attacked Palma town ,close to the construction site where the LNG plant was being built.
While Mozambican forces - supported by tier counterparts from Rwanda and the Southern Africa Development Community - appear to have been successful is limiting the insurgency, TotalEnergies has yet to say when it aimed to restart construction activities at the Afungi site outside Palma.
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