PREVIEW
Lambasted by Trump supporters, the US credit bank may help Exxon Mobil mega gas project in Cabo Delgado
Initially TotalEnergies’ use of Washington lobbyists to push through a vital US loan for its US$20 billion gas export project in Mozambique’s Cabo Delgado province backfired. France’s TotalEnergies had offered the lobbyists a bonus if they could secure Eximbank’s approval for the loan before Donald Trump was sworn in. TotalEnergies assumed that Trump, like his America First supporters, would oppose lending to a French oil company but the old board of Eximbank deferred the decision. Then Trump used his patronage powers to appoint a new Eximbank board but to some surprise they approved the loan on 13 March.
It seems the new board was persuaded to make the $4.7bn loan – the biggest in the bank’s history – because it would expand fossil fuel production and US companies would get contract and jobs. Eximbank’s official release plays down the financial benefits for France and Mozambique. It also omits details on the political security context – that the gas project is guarded by Rwanda Defence Force troops against threats from jihadist insurgents operating in the provinces.
The loan may also will encourage Total’s rivals also hoping to finance projects in the region (AC Vol 66 No 1, TotalEnergies makes a dash for the US gas cash). The loan decision was key to viability of the project on the Afungi peninsula, due to be relaunched in mid-2025.
The approval was the first by Eximbank since Trump’s inauguration and will be followed by more fossil fuel projects. US Exim is also considering whether to fund a rival Coral North LNG project in Mozambique led by Italy’s Eni.
Some conservative US commentators such as the Wall Street Journal, have questioned why US Exim should finance a French-led project. Yet the approval of the loan, originally granted during Trump’s first presidency in 2020, is vital to another project in Mozambique – by ExxonMobil. Back in 2020, US Exim had justified the loan by stating that without its support, China or Russia would finance the project.
Last month, a delegation from ExxonMobil held talks with Mozambique’s President Daniel Chapo, still facing opposition over the disputed elections, and reaffirmed its commitment to its own Cabo Delgado project. That is the plan to develop an offshore LNG terminal known as Rovuma which has been repeatedly delayed (AC Vol 62 No 19, Nyusi's breaking point). In November, Exxon pushed back its plans for a final investment decision on Rovuma to 2026.
Eximbank says the loan will support some 16,400 American jobs over the five years of the construction project. It adds that the cash will be used to support the engineering, procurement, and construction of the onshore LNG plant, related facilities, and offshore activities.
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