French energy giant TotalEnergies is currently facing a pivotal challenge in unlocking a substantial loan worth $4.7 billion from the Exim Bank of the US earmarked for its natural gas endeavor in Mozambique. This situation has garnered significant attention especially with the impending change in the US administration, as President-elect Donald Trump prepares to assume office.
The approval for this substantial credit was initially granted by the Exim Bank in 2019. However, due to the escalation of Islamist violence in the Cabo Delgado region, TotalEnergies was compelled to withdraw its staff from the project in Afungi, consequently halting the loan proceedings. In light of these circumstances, TotalEnergies has taken proactive steps by enlisting the services of a consultancy firm to conduct lobbying efforts in Washington, aiming to expedite the approval process before potential bureaucratic hurdles arise under the new administration.
TotalEnergies remains apprehensive that the transition of power in the US may introduce unforeseen delays or additional conditions to the loan approval. The resurgence of post-election violence in Mozambique has also compounded concerns within Washington, further complicating the situation.
In a letter addressed to US authorities on December 3, TotalEnergies’ chief executive Patrick Pouyanne sought to assuage Washington’s apprehensions, highlighting the notable improvements in the security situation within Cabo Delgado. The collaborative efforts with Rwandan and southern African forces have facilitated the recapturing of territory from insurgents, allowing for the safe return of displaced civilians to their homes.
Despite the positive developments, the approval process for the loan remains in limbo. While the Exim Bank’s Transactional Risk Committee endorsed the resumption of the loan in February, a conclusive vote by the board is yet to be reached.
It is worth noting that TotalEnergies’ natural gas project in Mozambique has encountered opposition from certain Democratic lawmakers who oppose the allocation of American financing towards fossil fuel initiatives. This ideological divide underscores the broader debates surrounding climate change, energy policies, and international investments.
Overall, the narrative surrounding TotalEnergies’ endeavors in Mozambique encapsulates a complex interplay of geostrategic considerations, security challenges, economic interests, and political dynamics. The outcome of the loan approval process will not only have profound implications for TotalEnergies’ operations but also signal broader shifts in transatlantic relations and energy investments in the post-pandemic world.