FUELLINGTHE CRISIS IN
MOZAMBIQUE
How Export Credit Agencies Contribute to Climate Change
and Humanitarian DisasterA Case Study From Mozambique2| ﻿Fuelling the Crisis in Mozambique
How Export Credit Agencies contribute to climatechange and humanitarian disasterA case study from Mozambique
16 May 2022
Published by: Friends of the Earth Europe and Justiça
Ambiental (Friends of the Earth Mozambique)https://friendsoftheearth.eu
https://ja4change.org
Author: Anneke Wensing
Developed in collaboration with Friends of the EarthEngland, Wales and Northern Ireland, Friends of the
Earth US, Les Amis de la Terre (Friends of the EarthFrance), Milieudefensie (Friends of the Earth Netherlands) and ReCommon (Italy).
We thank Both ENDS, the Global Strategic Communication Council (GSCC network) and SOMO for theircontributions.

Table of contents04

Abbreviations and definitions

06

Foreword

07

Executive Summary

12

I - Introduction

16

II - Impacts of LNG projects in Mozambique17

Climate impact

17

Environmental impact

18

Impact on Livelihoods, loss of land and housing: Displacement,
accommodation and compensation.

20

LNG development and escalating violence

21

Government response

21

Militarization of Cabo Delgado

22

Humanitarian disaster and refugees

22

Freedom of Press and Civic Space

22

Addressing the roots of the conflict

23

Economic issues: Lack of economic development for Mozambique

23

Lower revenues

24

Corruption

24

Lack of benefits for citizens

25

Conclusion

26

III - ECA support for LNG in Mozambique

27

Incorrect assessment of climate impact

28

Climate court case in the UK28

Gas lock-in undermines a Just Transition29

Unclear and inconsistent assessment of environmental and social impacts,
including security

29

Lack of assessment of economic impact, risks and corruption

30

Lack of transparency

31

Corporate interests take precedence over people, the environment and theclimate31

Conclusion

32

IV - Phasing out fossil support

33

Policies to phase out new fossil investments

34

Glasgow Statement on Public Finance

35

Recommendations to implement the Glasgow Statement on Public Finance35

Supportive policies and policy coherence

37

Conclusion

38
41

V - Recommendations
VI - Timeline

43

SourcesAbbreviations and definitions

4 | ABBREVIATIONS AND DEFINITIONS

Abbreviations and definitions
ADSB

Atradius Dutch State Business (Dutch Export Credit
Agency)AGM

Annual General Meeting

Anadarko

US oil and gas transnational corporation – acquired by
Occidental Petroleum (Oxy) in 2019

BII		British International Investment

BPIFrance

Banque Publique d’Investissement de France (French
Export Credit Agency)

CCS		

Carbon Capture and Storage

CCUS

Capture Capture Utilisation and Storage 		

CNPC		

Chinese National Petroleum Company

CSO

Civil Society Organisation			

CTT		

Central Térmica de Temane

DAG		

Dyck Advisory GroupECA		

Export Credit Agency

ECIC		

Export Credit Insurance Corporation of South Africa

EIA		

Environmental Impact Assessment

EIB		

European Investment Bank

ENH

Empresa Nacional de Hidrocarbonetos (Mozambique
State’s oil and gas company)

Eni

Italian transnational energy corporation

EO		

Executive Order

ESAP		

Environmental and Social Action Plan

EXIM China

Export-Import Bank of China

EXIM Thailand

Export-Import Bank of ThailandEU		European Union

ExxonMobil

US transnational energy corporation

FID		

Final Investment Decision

FLNG		

Floating Liquefied Natural Gas

FoE		

Friends of the EarthFoE EWNI

Friends of the Earth England, Wales and Northern
IrelandFPIC		

Free, Prior and Informed Consent

G7

Ministers of Finance and Presidents of Central Banks
from Canada, Germany, France, Italy, Japan, US, UK

G20

Ministers of Finance and Presidents of Central Banks
from Argentina, Australia, Brazil, Canada, China,
Germany, France, India, Indonesia, Italy, Japan, Mexico,
Russia, Saudi-Arabia, Turkey, UK, US, South-Africa,
South Korea, European Union

IDPs		

Internally Displaced People

IEA

International Energy Agency

IMF

International Monetary FundJBIC

Japan Bank for International Corporation

JA!

Justiça Ambiental - Friends of the Earth Mozambique

KEXIM

Korea Export-Import Bank

K-SURE

Korea Trade Insurance Corporation

FUELLING THE CRISIS IN MOZAMBIQUE | 5

LBI

Legally Binding Instrument

LNG

Liquefied Natural Gas

MDB

Multilateral Development Bank

mHREDD

Mandatory human rights and environmental due
diligence

NEXI

Nippon Export and Investment Insurance (Japan)NGO

Non-Governmental Organisation

OECD

Organisation for Economic Co-operation andDevelopment

PIDG

Private Infrastructure Development GroupSACE

Italian Export Credit Agency

SDGs

Sustainable Development Goals

TotalEnergies

French transnational energy corporation

UK

United Kingdom

UKEF

UK Export Finance (UK Export Credit Agency)

UNFCCC

United Nations Framework Convention on Climate
ChangeUPR

Universal Periodic Review

US(A)United States (of America)

US EXIMUS Export-Import Bank (US Export Credit Agency)

6 | ABBREVIATIONS AND DEFINITIONS

Foreword
As soon as gas was ‘discovered’ off the pristine coast of Cabo
Delgado, northern Mozambique became another illustration of
the merciless and irreversible destruction caused by the fossil
fuel industry in the global South. Only a few years ago, Cabo
Delgado was a peaceful, lush, green coastal province with a large
rural population of farmers and fishers, many living where thesand and the grass met under their feet, and with an income
supplemented by a thriving tourism industry. It was certainly
not all roses – poverty was and remains rife – but communities
had their territories, free access to water, sea and forests, and asustainable livelihood.
Ten years later, the industry has left thousands of people
displaced and without livelihoods, ruined the environment andfuelled an ongoing five-year violent conflict that has madenearly one million people refugees in their own country, andthousands of innocent people murdered in cold blood. The
industry and its historical power dynamics has pushed Mozambique further into a deep hole of debt. None of this gas has evenbeen extracted yet. If this is the suffering it has created already,it is terrifying to imagine what is yet to come.
All players in this industry are at some level complicit in thisdevastation – fossil fuel companies, private financial institutions, the international development banks and contractors.
But some of the greatest culprits are Export Credit Agencies of
wealthy countries, who use public money to invest in gas under
the guise of the euphemistic ‘development of Mozambique’. In
reality this is no more than neocolonial extractivism, exploitation
by northern countries who grab our resources, increase poverty,
pollute our water and rivers, and exacerbate the climate crisis
which ultimately disproportionately damages Southern countries.
This economic model that allows corporations and governments
to violate human and environmental rights with impunity, needs
to be replaced by one that brings real solutions to the climate
and other crises we are living through today.
This report has been written by organisations from six countries,
including Mozambique, collectively campaigning against the gas
industry in Cabo Delgado. But most importantly, this report has
been created with the invaluable stories from people, affected
community members who have put their lives at risk to provide
testimonies.
This report is crucial to bring justice for the Mozambican people.
It details the impacts of this industry and unwinds a spiderwebof complex economic information, so the international public
can understand how governments are using tax money to fueldestruction in a place they think no one will notice, and why theyneed to be stopped, immediately.
Anabela Lemos
Director Justiça Ambiental, MozambiqueAnabela Lemos, Director Justiça
Ambiental, Friends of the Earth
MozambiqueExecutive summary
FUELLING THE CRISIS IN MOZAMBIQUE | 7

Executive summary
The focus of this report is public finance support ofExport Credit Agencies (ECAs) in the Netherlands, theUnited Kingdom (UK), the United States (US), France
and Italy for Liquefied Natural Gas (LNG) projects
in Mozambique. We have reviewed the impacts of
the LNG projects in Mozambique in relation to theapproval of public finance support. Our findings showthat while the potential negative impacts of the
projects were well-known in advance, the analysis andassessments of the ECAs reviewed were incomplete,inconsistent or incorrect and not in line with ECAs
obligations regarding due diligence and transparency
on issues such as climate change, environmental andsocial impacts and human rights. We are therefore
calling on ECAs to withdraw their already committed
support and not provide any new finance for LNG projects in Mozambique. Relevant governments, companies and ECAs need to ensure compensation andreparations for impacted communities and ecosystems. We also expect governments to develop andimplement policies for a rapid phase-out of all publicfinance support for fossil fuel projects.

Gas in Mozambique
In 2010 and 2011, massive offshore gas fields were
found in northern Mozambique. Large transnational
corporations in oil and gas, with headquarters inhigh-income countries and supported by their governments, immediately started developing plans to
exploit these gas fields for large profits, and almost
completely for export, in close cooperation with theMozambican government based in southern Mozambique. Three large Liquefied Natural Gas (LNG) projects with both onshore and offshore components havesince been developed, collectively worth billions of
US dollars: Mozambique LNG (TotalEnergies) and theCoral South Floating LNG project (Eni and ExxonMobil)
which are in their construction phase, and Rovuma
LNG (Eni, ExxonMobil and the Chinese National Petroleum Company (CNPC)) which has not yet started,
pending its Final Investment Decision (FID).

Conflicts and instability
From the beginning, it was clear that gas extraction innorthern Mozambique, more precisely in Cabo Delgado
province, was associated with high risks. Cabo
Delgado is one of the poorest regions of Mozambique,where residents feel abandoned by a government thathas focused investment in the south of the country
and a young generation of men, facing unemployment
and little prospect of a future, have been showing
signs of rebellion against the ruling power since 2007.1
The presence of large amounts of valuable natural
resources, such as gas and gold, from which the local
population benefits little to not at all, constitutes ahighly inflammable situation. This was further accel-

erated by a massive corruption scandal that came tolight in 2016 - the Tuna Bonds scandal - which caused
large debts and a deep economic crisis after the International Monetary Fund (IMF) and international donors
withdrew their support to Mozambique.2
The gas projects have major impacts on the environment and the communities living in areas where thegas extraction companies construct their LNG plants
and related infrastructure. For the construction of theonshore Afungi LNG park, 557 households will haveto be relocated according to the industry3, leaving
behind their homes and livelihoods, mainly farming,fishing and tourism. From the start, the resettlement
consultation and plan were flawed and according tofield research by Justiça Ambiental (JA! or Friends ofthe Earth Mozambique) more than half of the people
who were forced to resettle are still waiting for thecompensation they are entitled to at the date of
publishing this report.
This combination of factors and developments fuelled
the existing discontent in the area and contributed
to violent insurgencies from 2017 onwards, causing
death and terror among the local population. In Marchand April 2021, a violent attack on the town of Palma,in the heart of the gas extraction area, ultimately led
TotalEnergies to declare Force Majeure.4 The Mozambique LNG project has been at a standstill ever since,and for Rovuma LNG, the Final Investment Decision
has still not been signed after several postponements.
Amnesty International5 draws a horrific picture of theabuses and human rights violations by the insurgents,that include beheadings and chopping people into
pieces. Young boys and girls are abducted to become
part of the militias. Sexual violence is common andwidespread. Consequently, the attacks on civilians
have led to the displacement of hundreds of thousands of people and a large-scale humanitariancrisis in the area. The Mozambican government isintervening by deploying military and private security companies who in turn are also violating humanrights and contributing to a further deepening of thecrisis. On request of the Mozambican government
the international community got involved as well. The
Mozambican troops received training from the EU6
and the US7 and Rwanda and SADC8 are intervening
with military forces. Journalists and NGO activists whoreport on the conflict are intimidated, illegally detainedand even tortured or murdered which makes it hardly
possible to get a good picture of the current situationin Cabo Delgado.9 10 It is beyond doubt however that
security and stability in the region have been eroded
to such an extent that no sustainable solution is insight within the foreseeable future.

8 | EXECUTIVE SUMMARY

Climate change
In 2015, 4 years after the gas discoveries, countries
agreed at the UNFCCC climate conference in Paris tolimit global climate warming to well below 2 degrees
Celsius, and to pursue efforts to limit the temperature
increase to 1.5 degrees Celsius.11 The largest contributors to climate change are fossil fuels. However,instead of making immediate and strong efforts tofurther scale up renewable energy and phase out fossil
fuels, the extraction and use of fossil fuels, and gas inparticular, has increased significantly since that time.
In this context, gas is promoted by some countries
as a ‘transition fuel’, a necessary intermediate step
between coal and renewable energy. However, scientific data shows that gas also produces high greenhouse gas emissions, particularly methane, and anincrease in gas projects stands in the way of achieving
the Paris goals.12 13
Research shows that the three gas extraction projects
in Cabo Delgado have the potential to result in anenormous release of greenhouse gas emissions, which
could increase the whole of Mozambique’s emissions
by 14%.14 The end use/burning of the gas (scope 3)
for the Mozambique LNG project, estimated to bearound 116 MtCO2e per year, is equivalent to the total
emissions from the aviation sector for all EU member
states combined.15 Ironically, Mozambique is extremely
vulnerable to climate change and is already struggling with the severe impacts of drought, flooding andweather extremes. The LNG projects will only further
exacerbate climate change. Combined with poverty
and weak institutional development, extreme weather
events have a devastating impact on the population, especially along the densely populated coastal
lowlands.16

Lack of economic benefits for Mozambique
The gas projects in Mozambique are touted by fossil
companies as essential to Mozambique’s economic
development. However, the ‘gas for development’story is failing desperately for a multitude of reasons.
Revenues from the projects will first and foremost
benefit the foreign companies involved and in thisprocess billions are lost for Mozambique throughtax evasion structures set up by the companies17, a
weak fiscal context and low governmental capacity.18
Mozambique is the last one on the list to benefit fromthe gas extraction, after all investment costs havebeen covered, which will likely take at least another 10
years.19 Meanwhile, the gas-related conflict, as well as
corruption and debt issues linked to the gas discoveries, are tormenting the country and have worsened
the economic situation and instability instead ofmaking things better. There are no solutions in sight.
In addition, worldwide gas prices are highly volatile,
making it difficult to foresee the long term future ofpotential revenues. Even though current gas prices are
high, the future of gas is looking less optimistic than
expected due to changing global climate and energy
policies.20 As the world is moving towards phasing

Instead of making
immediate and strong
efforts to further scale
up renewable energy
and phase out fossil
fuels, the extraction anduse of fossil fuels, andgas in particular, has
increased significantly

FUELLING THE CRISIS IN MOZAMBIQUE | 9

out fossil fuel public finance and towards renewableenergy, the economic prospects of gas will be severely
affected and fossil fuel investments risk becoming
stranded assets in the near future.21
At local level, the projects hardly provide any jobs forthe population who instead have seen their livelihoods
vanish. Making things worse, the force majeure has
destroyed the local economy and small businesses
that had come into existence alongside the gas
industry. Also, with most of the gas being exported22
and limited investments in renewable sources, accessto energy for the Mozambican people will not increase
as a result of the gas projects.

Undermining a just transition to renewablesources of energy
The large investments in new fossil fuel projects
are not only contributing to increasing greenhousegas emissions but are at the same time slowing
down investments in renewables. Research showsthat new gas infrastructure locks in emissions forthe long term. Multibillion-dollar gas infrastructureis designed to operate for decades to come, not totransition quickly to renewables. This is even moretroublesome knowing that Mozambique has favorable
conditions for both wind and solar energy. Already in
2018, the Netherlands Enterprise Agency, publisheda report on energy in Mozambique which pointed outthat Mozambique possesses an enormous renewableenergy potential, but that the development of renewables has been hindered by the country’s dependency
on fossil fuels and that fossil fuels will likely remain adriving economic consideration due to the substantial
offshore gas reserves.23 To date, the total international
support for all renewable energy projects in Mozambique is 230 million USD – one-sixtieth of the amountof public finance for the Mozambique LNG project
alone.24

The role of Export Credit Agencies
Despite the harmful impacts of gas extraction projects in Mozambique and the associated risks, the LNG
projects are supported by governments of middle- andhigh-income countries through Export Credit Agencies(ECAs). ECAs are government-affiliated financial institutions that provide credit, insurance or guarantees
to companies doing projects abroad. The risks related
to these commitments are borne by the respective
governments.
The projects in Mozambique are supported by ECAs
from China, France, Italy, Japan, Korea, the Netherlands, South Africa, the United Kingdom (UK) and theUnited States (US). In this report we focus on ECAs
from the Netherlands, France, Italy, UK and the US,
who together approved almost $9 billion to Mozambique’s gas projects in direct loans, credit and insurance. Through Freedom of Information (FoI) requests
and other legal measures, Friends of the Earth (FoE)

groups and other environmental organisations25 basedin these five countries have tried to gain more insightin the ECA decision-making processes that led to theapproval of public finance support to the projects in
Mozambique. Unfortunately, these efforts have notresulted in full or even adequate disclosure.
Even though due diligence measures must be taken
by ECAs and the OECD recommends transparency, it
is for a large part unclear which analyses and assessments were used and on what grounds the projects
were approved. The UK and US ECAs committed
their support to Mozambique LNG after the first
violent insurgencies started in 2017, the Dutch ECAADSB even went as far as committing support one
day after the violent attack on Palma in 2021 that
ultimately forced TotalEnergies to declare force
majeure. Throughout the project development process,concerned CSOs have been flagging the human rights
risks and escalating conflict dynamics on the ground.
In addition, all reviewed ECAs made their commitments after the so-called Tuna bonds corruption
scandal and related economic crisis in 2016. Moreover,climate impacts were not sufficiently assessed eventhough experts have been warning for years about the
impact and risks of continued investments in naturalgas.
In the Netherlands and the UK, and probably also inother countries, the ECAs used a report by consultancy agency Wood Mackenzie to assess the climate
impact of Mozambique LNG. The FoI process in the
Netherlands led to the disclosure of this assessment, which shows that the approval of Mozambique
LNG was based on an incorrect assumption and an
incomplete calculation of emissions. Not only did
Wood Mackenzie use a 2˚C scenario instead of a 1.5˚Cscenario, it also did not calculate scope 3 emissions
resulting from the project. The assessment also
clearly indicates that it is unable to provide a definitive
assessment on emission reductions of the Mozambique LNG projects, refuting the argument of ‘gas as atransition fuel’. The Environmental Impact Assessmentof Eni’s Coral South FLNG project also lacks scope 3
as well as fugitive (methane) emission calculations
and concludes that the emissions from the project are‘negligible’.26
The FoI requests have so far not delivered all thenecessary documents to ascertain that thoroughdue diligence took place regarding social and environmental impact, security risks and (the lack of)
economic benefits but found merely assumptions
that the projects will contribute to development
and risks, including the violent conflict, will be kept
under control. For example, the Environmental andSocial Impact Plan (ESAP) related to the Mozambique LNG project has not (yet) been shared. Also,the (few) documentations received in the Netherlands
to date, show that the approval was given while the
ESAP was still being developed and that reservations
and concerns from important actors like the Dutch

10 | EXECUTIVE SUMMARY

Embassy in Maputo were hardly considered. Altogether, the documents received and analysed create a
picture in which the interests of domestic companies
take precedence over the people in Mozambique andcommitments to international policies and obligations.

Climate case in the UK
In the UK, Friends of the Earth EWNI initiated a litigation process, concerning whether UKEF’s financial
commitment to Mozambique LNG violates the UK’scommitments under the Paris climate agreement.
The first Judicial Review gave a potentially hopeful
outcome in March 2022: One of the two judges judged
UKEF’s support to Mozambique LNG to be ‘unlawful’
and the case will now go to the Court of Appeal (final
judgement expected in the second half of 2022 or
early 2023). If the judges ultimately rule that the
ECA commitment was indeed unlawful, it should be
withdrawn. This can set a precedent for NGOs in othercountries to launch similar lawsuits.

Recommendations
The humanitarian disaster currently taking place innorthern Mozambique is linked to the gas discoveries
and the operations of fossil transnational corporations
and their financiers. ECA support for these projects
has been essential: Given the large and well-known
risks that the gas projects in the area entail, it ishighly unlikely that companies would have taken theserisks without the backing of public finance support.
The grounds on which the ECAs in countries like theNetherlands, France, Italy, the UK and the US, haveapproved their support are incompatible with thesecountries’ commitment to the Paris agreement andnational and international agreements on responsible
governance. Below, we list urgent recommendations toaddress the current situation in Mozambique as well
as recommendations to ensure that ECAs effectively
phase out fossil support by the end of 2022.

The end of public fossil finance: Glasgow
Statement

1. Recommendations related to the LNG
projects in Cabo Delgado, Mozambique

Another important development is the recent commitment of 34 countries, including all countries reviewed
in this report, and 5 financial institutions at the
UNFCCC climate conference in Glasgow (November2021) to stop funding any new unabated fossil fuelprojects with public money by the end of 2022.27
The UK had already developed a policy to end public
fossil finance by the end of March 2021. The othersignatories to the Glasgow Statement are now in theprocess of translating their commitment into policy.
It will be crucial to ensure that countries comply totheir climate commitments by the end of this year andintroduce and implement policies that are well-defined, ambitious and in line with the latest scientificclimate research on what is needed to limit global
warming to 1.5˚C. Such policies should not allow for
exemptions for gas related investments.

The LNG projects in Cabo Delgado, Mozambique, areincompatible with the 1.5˚C global warming goal as
set out in the Paris agreement and the projects havecontributed to social tensions escalating into violent
conflict and humanitarian disaster. It is therefore
necessary to end the industry’s operations immediately, safely dismantle current infrastructure andensure compensation and reparations to impacted
communities and the environment, as well as support
Mozambique´s sustainable future by supporting thefull development of its renewable energy potential. All
parties involved should take their responsibility in thisprocess:

Legislation to regulate corporations andenhance accountability
Apart from climate agreements, the Mozambique casealso shows that ECAs and the companies they support
are not taking sufficient measures to prevent and mitigate environmental damage and human rights violations, and fail to be transparent on how public money
is being spent. The rapid development of international,
regional and national binding legislations for transnational corporations and other companies acrosstheir global value chains could contribute to ensuringcorporate accountability, which is urgently needed.
However, even though promising developments aretaking place at all levels, these policy processes are
slow and holding companies and financial institutions accountable once legislation is approved, is yet
another hurdle to take.

• ECAs from the Netherlands, France, United
Kingdom, Italy, the United States, Korea, Japan,
China and South Africa, and other investors, should
withdraw their financial support to the LNG projects in Mozambique based on the grounds that thedecision-making process was flawed and basedon the wrong assumptions. In addition, the ECAs
and other investors should critically review theirdecision-making and due diligence processes that
led to the approval of support for the LNG projects
in Mozambique and be transparent about this.
• TotalEnergies should ensure an immediate, justphase-out of the Mozambique LNG project.
• Eni, ExxonMobil and CNPC should cancel the
Rovuma LNG project, not moving forward with the
Final Investment Decision.
• Eni and ExxonMobil should dismantle the Coral
South FLNG plant, ensuring reparations of current
environmental impacts, as is incompatible withclimate commitments, causes irreversible environmental damage and will not deliver economic
development or prosperity for Mozambique.

FUELLING THE CRISIS IN MOZAMBIQUE | 11

• TotalEnergies should ensure the full implementationof their resettlement commitments as laid out inthe resettlement plan immediately and generouslycompensate displaced people and repair broken
commitments.
• TotalEnergies, Eni, ExxonMobil as well as othercompanies and players, financiers and governmental actors must make reparations, including
ensuring financial compensation, for environmental
destruction and the impacts they have had oncommunities, including displacement and lossof livelihoods, based on the demands of affected
people.
• All companies, financiers and government actors
should work together to initiate sustainable development and just transition interventions andaddress the (effects of) violence, trauma, foodinsecurity, displacement, by ensuring:• The development and implementation of sustainable energy policies, prioritizing energy needs ofMozambican citizens and renewable energy andenergy efficiency;• The withdrawal of military troops and private
security companies and addressing the serious
human and women’s rights violations andsuppression by military forces, holding responsible parties accountable.

2. Policy recommendations to prevent andend harmful fossil fuel projects worldwide
In order to end (investments in) new, harmful fossil
fuel projects, it is important that governments show
ambition and urgency in the implementation of the
Glasgow commitment ending direct and indirectpublic fossil finance and develop and implementbinding national, regional and international legislation
to regulate corporations.
a. Recommendations on implementing the Glasgow
Statement on international public finance:• Define the term ‘unabated’ to mean an end to all
upstream and midstream fossil finance to avoid
any misuse or continued support for fossil fuels.
• Define ‘limited and clearly defined exceptions’to ensure that these do not allow for support forgas infrastructure, anywhere in the world.
• Avoid an increase in direct support for fossil
fuel projects before the 2022 deadline: Review
funding for all proposed fossil fuel projects
to ensure they meet the Glasgow statement
requirements before the end-2022 deadline tolimit gas lock in.
• Ensure the commitment extends to related fossil
fuel infrastructure, including transportation,
ports, airports, etc.

• Extend the Glasgow commitment to domestic
support for fossil fuels.
b. Further recommendations for Export Credit Agencies and the governments behind them:• Ensure that ECAs act in line with the OECD
Arrangement and the Common Approaches
and ensure that the OECD Arrangement andCommon Approaches are soon reviewed toalign them to the Paris Agreement and Glasgow
Statement.
• Ensure that ECAs rigorously improve and betransparent about their Due Diligence practices
including ensuring clear contractual clauses onwhen to pull out of a project.

3. Recommendations for corporate
accountability legislation• Develop and implement strong and effective
binding rules for corporations at national, regional
and international level, including constructively
engaging in the process towards a UN legallybinding instrument to regulate transnational corporations in human rights law.
• Ensure that any legislation to regulate corporations includes the legal responsibility of parent
and outsourcing companies over their whole value
chains and business relationships, as well as
provide justice and remedy for all affected people,
as soon as possible and at all levels (national,
regional and international). New laws must clarify
that the company’s primary obligation is to preventor bring an end to harm, and companies must not
be able to escape liability for harm by arguing thatthey have respected due diligence obligations.
• Ensure that any new legislation includes administrative, civil and criminal liability when companies
do not comply with their obligation to prevent
human rights violations and environmental harm,
and when they cause or contribute to violations
and harm, and the removal of the obstacles that
affected people face when seeking justice.
• Ensure that new corporate legislations include
concrete obligations for all companies to identify
the climate risks in their value chains, make a plan
to bring them in line with the Paris Agreement,
including short, medium and long term emission
reduction targets and take measures to reduce
their total emissions (scope 1, 2 and 3) in theirglobal value chains.
• Ensure that any new legislation includes strong andeffective enforcement mechanisms and adequate
sanctions for non-compliance.

12 | EXECUTIVE SUMMARYI
INTRODUCTION

Introduction
FUELLING THE CRISIS IN MOZAMBIQUE | 13

Mozambique is not only one of the poorest countries
in the world28, it is also home to one of the largest
natural gas reserves in Africa. In 2010 and 2011, theUS energy company Anadarko and Italian energy
company Eni discovered large quantities of natural
gas off the coast of the Cabo Delgado province inNorthern Mozambique (Area 1, closest to the shore,and Area 4, respectively), making them the most prosperous offshore natural gas reserves in the country.
In 2019, Anadarko’s assets in Area 1 were sold to the
French energy company TotalEnergies for a total
amount of 3.9 billion USD.29
The exploration of the gas fields has been negotiatedbetween the Mozambican government and international energy companies without involvement of
the local population. Currently, there are three large
liquefied natural gas (LNG) projects planned or underconstruction in the Cabo Delgado province:
1. Mozambique LNG: The output, expected to be
12.88 million mt/year30, from the gas fields in Area
1, will be transported to the onshore Afungi LNG
Park through a 45 km-long subsea pipeline. At theAfungi LNG park the gas is cooled down to -162oC
and transformed into liquid. It will then be exported
to other countries through cryogenic vessel tanks
or LNG tankers. The project is led by TotalEnergies and the Final Investment Decision (FID)31 of$20 billion for this project was signed in 2019. The
project is currently on hold due to the insecurity inthe region.
2. The Rovuma LNG project, led by Eni, ExxonMobil
and the Chinese National Petroleum Company(CNPC), is based on three gas reservoirs of theMamba complex in the Area 4 block of the Rovuma
Basin, located approximately 40km off the Cabo
Delgado coast. The plan is for the gas to be transported through pipelines to the Rovuma LNG
terminal which will be constructed at the onshore
Afungi LNG park, where the gas is liquefied forfurther distribution. The FID to extract 15.2 million
mt/year32 has been postponed multiple times and is
still not signed.
3. The part of Area 4 that lies too far from the coast totransport gas to the shore through pipelines will beliquefied on-site. Therefore, a floating LNG (FLNG)
plant with a capacity of 3.4 million mt/year33, hasbeen built in South Korea. The vessel arrived in
January 2022in Mozambique and the FLNG plantshould become operational in the second halfof 2022.34 This project is the Coral South FLNG
project, led by Eni and ExxonMobil. The $7 billion
FID was signed in 2017.35
From the start, NGOs and experts have indicated theharmful climate, environmental and human rights
impacts that the gas projects would cause, in combination with questionable (developmental) benefits for
Mozambique and the people in Cabo Delgado. For theonshore Afungi LNG park, large resettlement plansof farming and fishing communities in these areas
are incorporated, robbing people from their common

histories, houses and livelihoods. In addition, the Cabo
Delgado is a conflict-prone province, which is further
exacerbated by the gas discoveries and external interests in the area.
Even though the gas exploitation is associated withhigh risks and armed conflicts have led to extreme
suffering and insecurity in Cabo Delgado and neighbouring provinces since 2017, the projects are backed
by Export Credit Agencies (ECAs) from 10 countries(China, France, Italy, Japan, Korea, the Netherlands,
South Africa, Thailaznd, the United Kingdom (UK) andthe United States (US)), providing insurance, guarantees, credit and loans worth billions of US dollars.36 37

What are Export Credit
Agencies?
ECAs are private or quasi-governmental
institutions that act as intermediaries
between national governments andexporters to cover financial risks. Thiscan be done through providing credit(financial support) or credit insurance
and guarantees, or both, depending on
the mandate the ECA has been given
by its government. The risks on these
credits, guarantees and insurance, areborne by the sponsoring government.
Some ECAs can also offer credit or coveron their own account. Without government backing, this does not differ fromnormal banking activities.

In this report we focus on ECAs from the Netherlands,
France, Italy, UK and the US, who together approved
almost $9 billion in public finance support to LNG
projects in Mozambique. The focus on these five countries follows from several years of research by Friendsof the Earth (FoE) groups and other environmentalorganisations38 based in the respective countries togain more insight in the decision-making processes
within their country’s ECAs. In this report we present
our key findings and recommendations related to thisEuropean and US ECA support.

1. United Kingdom: UKEF financed the Mozambique
LNG project for $1.15 billion in loans and guarantees39 (June 2020).
2. The Netherlands: ADSB provided export credit
insurance to Dutch companies including Van Oord40
to engage in Mozambique LNG projects for almost 1
billion Euro (25 March 2021).
3. Italy: SACE approved project finance for SAIPEM41
and Eni in the Mozambique LNG and Coral South

14 | INTRODUCTIONLNG projects respectively. SAIPEM benefited froma guarantee of $950 million for loans covering its
contract under the Mozambique LNG project in
2020; the Coral South LNG project was financedwith a $700 million guarantee in 2017 at the benefit
of Eni.
4. France: BPIFrance provided an export credit insurance policy to seven financial institutions, includingbanks, for a total of $450 million, to support the
French company TechnipEnergies in engineering,
providing equipment, constructing, installing,
and commissioning the Coral South LNG project(approved late 2017).
5. United States: US EXIM (Export-Import bank)provided a loan of $4.7 billion (September 201942)
to support the export of U.S. goods and services
related to the development and construction the
LNG Afungi plant as well as the development of theGolfinho/Atum gas fields which will feed the LNG
plant.
Without this ECA support, it is very unlikely thatthe companies involved would have taken the risk
to engage in the Mozambique projects because ofissues around corruption and an unstable economy,
weak governance systems, escalating conflicts thathave been plaguing the region since 2017 as well as
strongly fluctuating gas prices. In March 2021 anextremely violent insurgence took place in Palma– a town located at the heart of the gas activities leading to TotalEnergies declaring force majeure43
in April 2021. The construction of the on-shore LNG
plants and the related gas exploration has been halted
ever since.
In addition to the acute safety and security risks, there
are many questions on why and how ECAs decided tosupport the projects related to climate, environmental,
developmental, and social impacts. In this report we
will explore how Dutch, French, Italian, UK and US
ECA support ultimately contributes to a wide varietyof negative impacts on one of the poorest and mostdisadvantaged areas of the world, including hinderinga just transition towards renewables, and what isneeded to move towards climate and social justice.
This publication follows years of research by NGOs on
ECA support for companies and transnational corporations, based in high-income countries, enablingthem to implement fossil projects in low-income
countries. Even though the OECD recommends ECAs
to be transparent about their support and decision-making, this is mostly not the case. Assessmentsof social, environmental and climate impacts and mitigation plans are not made public and for most ECAs it
is even unclear when decision-making takes place andwho is involved.
To gain more insight in the decision-making processes
around ECA support for the gas development inMozambique, Friends of the Earth groups and otherenvironmental organisations in the Netherlands,
France, Italy, UK and the US are seeking to obtain
information and documentation in various legal ways,

In this report we will
explore how Dutch,
French, Italian, UK
and US ECA support
ultimately contributes
to a wide variety ofnegative impacts on
one of the poorest andmost disadvantaged
areas of the world,
including hindering ajust transition towards
renewables, and whatis needed to movetowards climate andsocial justice.

FUELLING THE CRISIS IN MOZAMBIQUE | 15
Project:

Mozambique LNG

Rovuma LNG

Coral South FLNG

Led by:TotalEnergies

Eni, ExxonMobil and CNPC

Eni and ExxonMobil

FID year / amount:2019 / $20 billion

Not signed / estimated at$30 billion

2017 / $7 billion

Capacity

12.88 million mt/year

15.2 million mt/year

3.4 million mt/year

Projected start of the
project:

2024

Unknown2022

Onshore and offshore
components:

Gasfields in offshore Area 1;
Liquefaction at onshore Afungi LNG park.

Gasfields in offshore Area
4; Liquefaction at onshore
Afungi LNG park.

Gasfields in offshore Area 4;
Liquefaction at offshore
floating LNG plant.

ECA support France,
Italy, the Netherlands,
UK and US

UK UKEF:
1.15 billion USD (June 2020)--

Italy SACE:
700 million USD (2017)

Netherlands ADSB:
1 billion Euro (25 March 2021)

France BPI France:
450 million USD (2017)

US US EXIM:
4.7 billion USD (September 2019)
Italy SACE:
950 million USD (2020)
Other ECA support

Japan Bank for International Corporation(JBIC): $3 billion loan
Nippon Export and Investment Insurance(NEXI (Japan)): $2 billion loan insurance
Export Credit Insurance Corporation ofSouth Africa (ECIC): $800 million loan
Export-Import Bank of Thailand (EximThailand).

--Export-Import Bank of
China (Exim China): $500
million loan
a-Import Bank of Korea(Kexim): $500 million loan
Korea Trade Insurance
Corporation (K-Sure).

Table 1: Overview of LNG projects in northern Mozambique and ECA support

including through filing Freedom of Information
requests to their respective governments. In somecountries, this has led to some information being
shared, but key documents – for example the Environmental and Social Action Plan for Mozambique LNGare still not made publicly available.
The ongoing pressure of NGOs is reaping some results
though: for example, in the Netherlands, questions by
Parliamentarians resulted in the announcement of an
independent investigation on the financial commitments of ADSB in relation to the Mozambique LNG
project, particularly in relation to the safety and security situation.
Another interesting development is a climate
court case in the UK in which Friends of the EarthEngland, Wales and Northern Ireland (EWNI) challenges the approval of $1.15 billion by the UK Export
Credit Agency UKEF. EWNI claims that this approval
was unlawful as UK Export Finance has mistakenly
concluded the climate impacts of the Mozambique
LNG project we’re in line with commitments under
the Paris Agreement. A recent court order (16 March
2022) showed that the Judicial Review resulted in astark disagreement between two High Court judges.
One of the judges ruled that the approval was indeed
unlawful, yet the other judge did not agree. The
case will now be sent to the Court of Appeal for adecision.44 If the Court of Appeal finds the approval

unlawful, the ECA decision should be retaken resulting
in the withdrawal of support and similar cases can be
expected in other countries. More information on thecase can be found in Chapter 3.

II
IMPACTSOF LNGPROJECTS IN
MOZAMBIQUE

Impacts of LNG projects in Mozambique
FUELLING THE CRISIS IN MOZAMBIQUE | 17

The Mozambique LNG project intends to extract 65
trillion cubic feet of natural gas. The gas will be liquefied and stored in tanks at the onshore Afungi LNG
park, which covers an area of 70 km2 and includes adock to accommodate LNG carriers and two airstrips.45
The Afungi LNG park will also hold facilities for theother two projects. For the Mozambique LNG project,
the Afungi facility is expected to produce 12.9 million
tonnes per year of LNG in its initial phase, which canbe expanded to 43 million tonnes.46 The constructionof Mozambique LNG started in August 2019 and thestart of production is scheduled for 2024. However,the construction has been halted since TotalEnergies
declared force majeure in April 2021 and it is uncertain
when it will restart.
Patrick Pouyanne, CEO of Total, stated in February
2022 that ‘we will not build a plant in a country where
we'll be surrounded by soldiers’ and ‘we'll not relaunch
the project as long as I see photos from refugee
camps around the site’ 47, but at the same time thecompany also indicated its ambition to restart in 2022.
The Rovuma LNG project has not yet started, pending
the FID. It is the largest of the three projects, covering
2,500 billion m3 of gas and its estimated costs are
30 billion USD.48 The Coral South FLNG project, whichplans to extract 450 billion m3 of gas, operates almost
completely offshore and is therefore less influenced
by the security situation in the Cabo Delgado province.
The FLNG Terminal has been built in South Korea. It
sailed away in November 2021 and arrived in January2022 for gas production to start up in 2022.49
All three projects are associated with severe negative
impacts on a whole range of issues, including climatechange, the environment, local communities and livelihoods, corruption, conflict and security. Even thoughmany of these risks were well known before the startof the projects, they have largely been ignored or
downplayed when financial commitments by different
ECAs were made. In addition, there are many reasons
to assume that the projects will not reap benefits
for Mozambique nor for the local population. Quite
contrary, the large and long-term investments in LNG
are undermining Mozambique’s potential for a justtransition to renewable energy like solar and wind (seeChapter 3).

Climate impact
Gas is often presented as a ‘clean’ or ‘environmentallyfriendly’ fossil fuel, compared to coal. However, eventhough gas produces about half of the CO2 whenburned compared to coal, the greenhouse gas emissions that take place along the whole supply chain
are conveniently forgotten in this frame. In addition
to direct emissions from burning gas, gas production
leads to vast amounts of methane leakage along thewhole supply chain. Methane is a greenhouse gas witha warming effect 80 to 90 times stronger than CO2
over a 20 year timescale.50 Moreover, even if gas would
reduce current CO2 emissions to some extent, it will

not be enough to limit global warming to a maximumof 1.5˚C, which would require drastic and lasting emission reductions as soon as possible and does not allow
for any new fossil fuel projects according to the International Energy Agency (IEA).51 Expanding the global
gas sector as is currently happening, stands largely inthe way of reaching the Paris agreement.52
The most recent IPCC report (4 April 2022) states thatthe next few years are critical to limit climate change
and that methane emissions are a huge concern:
In the scenarios we assessed, limiting warming toaround 1.5°C requires global greenhouse gas emissions to peak before 2025 at the latest, and be
reduced by 43% by 2030; at the same time, methane
would also need to be reduced by about a third.53
Yet, the three gas extraction projects in Cabo Delgado
have the potential to result in an enormous release ofgreenhouse gas emissions, especially methane, which
could increase the whole of Mozambique’s greenhouse gas emissions by 14%.54 The end use/burningof the gas (scope 3) of the Mozambique LNG project,estimated to be around 116 MtCO2e per year, is equivalent to the total emissions from the aviation sector
for all EU member states combined.55 According to
FoE France, the total emissions of all three projects amount to 49 years of the current emissions ofMozambique.56
Ironically, Mozambique is one of Africa’s most vulnerable countries to climate disasters, such as droughts,
floods and cyclones which are already occurring more
and more frequently.57 The LNG projects will only
further exacerbate climate change. Combined withpoverty and weak institutional development, extreme
weather events have a devastating impact on the
population, especially along the densely populated
coastal lowlands.58 Women and girls are particularly
vulnerable to negative and long-lasting effects ofclimate change and disasters due to their socio-economic status, power imbalances and specific roles in
the community and the family.

Environmental impact
The development of natural gas in northern Mozambique has a huge negative impact on the environment
in Cabo Delgado. The sheer area of the project ismassive. In addition to the 70 km2 Afungi LNG park,
the subsea gas fields of Area 1 cover approximately
350 km2. Area 4 is even bigger, covering 10,207
km2. The extraction, processing, and transportationof gas requires dredging, drilling, disposal of (toxic)
waste materials both offshore and onshore, and theconstruction of extensive subsea, near-shore, andon-shore structures and infrastructure. Proponents ofthe projects frankly acknowledge substantial shortand long-term impacts like noise disturbance, habitat
destruction, biodiversity loss, vessel strikes59, andlighting impacts60 from the various aspects of the
project, including offshore drilling, cutting trenches forpipelines and shipping channels, construction of the

18 | IMPACTS OF LNG PROJECTS IN MOZAMBIQUE

LNG facilities and associated shipping terminal andairstrip, and the operation of the facilities.61 62
The construction of the Afungi LNG park destroys
farmlands, forests and the natural shoreline, places
that are home to many animals and plants as well as
local communities who are highly dependent on theland and the ocean for their livelihoods. The coast of
the Cabo Delgado province had recently attracted
increasing numbers of tourists who visited for the
beautiful scenery as well as its diving and snorkelling
potential. Due to the LNG projects, the islands ofTecomaji, Rongui, and Queramimbi, lost their attraction as tourist destinations.63
The oil and gas exploration and development activities produce anthropogenic noise under water,
including through seismic surveying to detect oil andgas deposits underneath the ocean floor. The habitat
degradation, biodiversity loss and noise resulting fromthe gas projects, will force animal species to leave thearea. The traffic to and from the extraction wells andthe floating LNG processing plant will also put the
wildlife that surrounds the plant at risk. Moreover, if
spills or gas accidents, which have become prevalentat energy extraction sites64, occur, the impacts will becatastrophic. These activities and impacts will also
affect the Quirimbas National Park, which lies only
eight kilometers from the southern boundary of Area 1.

Impact on Livelihoods, loss of land andhousing: Displacement, accommodation andcompensation.
According to the industry, 557 households in Cabo
Delgado will have to be relocated for the developmentof Mozambique LNG Project and the Area 4 Rovuma
LNG Project. These families will have to make space
for the onshore Afungi LNG park which will house thefacilities for the companies and contractors involvedin the industry. To manage the displacement of thesecommunities, a resettlement plan was developed
by Eni and Anadarko. The plan was approved by theGovernment of Mozambique on 8 November 2016 andAnadarko initiated its implementation on 6 November
2017.65 The resettlement is currently led by TotalEnergies, who took over Anadarko’s project. At their Annual
General Meeting (AGM) in 2021 TotalEnergies indicated that 404 families had been relocated.66
Relocated communities who lost their land weremeant to receive small plots and cash compensation
for their losses, however the compensation process
proved inadequate,67 68 and the system to track people
is flawed. For example, if people who are entitled
to compensation die, their family members have a
hard time accessing the compensation money. Thisis further complicated by the increasing violence inthe region (see below) in which people were killed
or forcefully displaced. The compensation process
also led to conflict between communities as people
outside of the concession area also experience huge
impact from the project but are not compensated.
Since TotalEnergies claimed force majeure in April

The three gas extraction
projects in Cabo
Delgado have thepotential to result inan enormous releaseof greenhouse gas
emissions, especiallymethane, which could
increase the wholeof Mozambique’s
greenhouse gas
emissions by 14%.

FUELLING THE CRISIS IN MOZAMBIQUE | 19

2021, the compensation payments stopped completely
according to Justiça Ambiental (JA! Friends of the
Earth Mozambique), leaving people to survive onhumanitarian aid in the wake of a full-blown insurgency.
JA! gathered information about the resettlement
process with the families and communities that wereaffected.69 They found that resettlement problems
had already started during the community consultation process, a process that was not in line with
Free, Prior and Informed Consent (FPICt) principles.
When Anadarko, and later TotalEnergies, representatives, visited communities for consultation meetings
they were accompanied by a military entourage. This,
along with the presence of leaders who often have abeneficial relationship with the company, meant that
community members were too afraid to speak out
and dissent, even if they disagreed. In some villages,
community members signed forms in Portuguese,which they could not read or understand. Some even
ended up agreeing to a meagre $50 for their land.
Many people were offered plots of farmland, or machambas, only a tenth of the size of their original plots.
It also proved problematic that the compensation
process was done in a public place and the contract
was read out loud with photo and video recording.
As a result, it was publicly known how much people
received, which made them targets of extortion,
ransom and kidnapping by police, military forces andcriminals.
Displaced fisherfolk were moved from living metresfrom the sea to many kilometres away in a relocationvillage called Quitunda, where they have no accessto the ocean. They were assigned the use of nearby
fishing grounds in the village of Salama, but were
not provided with any boats. The only way for themto get to the beach is by taking a bus, operated by
TotalEnergies, that goes back and forth once a day.
However, taking a bus to go fishing is not workable, as
fishing cannot be done on a fixed schedule. Women,
who would collect shells, plants and small animals at
the shore, are also restricted now. For the relocatedfarmers, so far, JA! found that less than half of themreceived adequate land. Many are still waiting and forothers the new ‘machambas’, or farming plots, are not
only small but are also located far from the communities’ new homes. This is a major problem, as manyfamilies are afraid to travel the distance because of
attacks by insurgents. In addition, some of the newly
allocated farmland is near another village, Senga,
and is already used by the residents of the village.
Not surprisingly, this provoked conflicts between theexisting and relocated communities.
Justiça Ambiental interviewed people before (2018)
and after (2020) their resettlement. Their testimonies
show that promises have been broken and that the
lives of relocated families have deteriorated sincetransnational corporations began the gas development.

Until the moment Anadarko came, they found us
living here. Our main activity is fishing, that's how wemanage to feed ourselves and take our children to theinitiation rites. When Anadarko came, they told us that
we are already entering the stage of being displaced
from here. Now, there where we are going, they are
telling us that they are going to allocate us one anda half hectares for each person. That is bad. Anotherthing is that we have lived here for a long time and wehave our property here. We don't refuse to leave but
the way we're being treated we're not getting it. Whenthey do the census of the fields they only count the
cashew trees, they leave out the cassava70 plants.
Arab Nchamo (2018, before resettlement)
When the company started to resettle people in
Quitunda, I didn't want to go there, because in myopinion there are some flaws in this process. Because
before, they said that they would allocate us farms
before we went to Quitunda and that we would becompensated for the farms that we lost, and also thatthey would show us the new fishing grounds. So far,none of these promises have been kept. Since they
took us away they still haven't told us where we aregoing to put our fields and our life is no better. The
company has still not completed the compensation
payment.
Arab Nchamo (2020, after resettlement)
The contribution that women make to their families
is not sufficiently recognized. Women often work theland that is owned by their husbands or other malefamily members and their work is not converted intovalue. One woman explains:
Until this age that I am today, my life is agriculture.
Only yesterday I was outraged because we as wives
live on our husband's property, and it is on theseproperties where we produce cassava, where we haveour fields. But when the owners come, they come toregister their goods and we who make cassava areleft out.
Bia Issa, wife of Arab Nchamo(2018, before resettlement)
When we arrived they started to make agreements.
When they made an agreement with the owners of theland where I was farming, all the assets went to them.
I cried so much, I stayed all the time crying, until I
slept at the fire. I didn't even wear clothes, I didn't eat
and I even became thin. When I went to Anadarko,
they said that my husband was the one who benefited
from everything. I was crying all the time.
Bia Issa (2020, after resettlement)
All in all, the compensation process shows that thefossil fuel industry is not able to oversee, compensate or repair the impact of the LNG projects on
local communities, including ensuring an inclusive
gender-sensitive approach.

20 | IMPACTS OF LNG PROJECTS IN MOZAMBIQUE

LNG development and escalating violence
The Cabo Delgado Muslim-dominated province is oneof the poorest areas of Mozambique, where conflicthas been boiling for many years. 52% of Mozambicans
live in the four northern provinces, where the poverty
rate is 68% compared to 19% in the South.71 Already in200772, frustrated ethnic Makua youth in the southernpart of the province denounced the authority of local
religious leaders. Ethnic Mwani militants in the coastal
district of Mocímboa da Praia had joined the fightby the mid-2010s. The group was making demands
for a more conservative social order such as callingfor alcohol bans and for children to be educated inmadrasas73 instead of state schools, but their anger
was also fuelled by their economic exclusion amid thediscovery of rubies and natural gas. The confiscation of the natural gas in northern Mozambique had
been prearranged by the southern-based regime andthe local population was not engaged in the decision making and planning of the gas projects. Whenauthorities expelled artisanal miners from commercial
mining concessions in early 2017 the boiling resentment and local discontent rose even further. Militants,
known to locals as Al-Shabaab74 moved to armed
revolt and aggressive attacks on civilians, in October
2017.75 The attacks, that have continued and further
escalated ever since, caused large-scale insecurity
and displacement. Between January 2017 and April
2021 almost 3,000 people were killed.76
However, despite the violence and the precarious
situation in the Cabo Delgado, the gas development,
including the forced resettlement, continued between
2017 and 2021. This came to an abrupt ending aftera violent attack by insurgents on Palma city on
24 March 2021, killing dozens of people including
foreigners working in the region.
Palma city used to be just another small fishing
town but had become the hub of Mozambique's
gas industry. At the time of the attack, Palma was a
rapidly growing town with significant foreign investment and more than 1,000 foreign workers linked to
the gas industry. Reuters reported 12 people, possibly
foreigners because they were white, were beheaded.77
The attack started only hours after TotalEnergies
announced an agreement with the Mozambique
government to restart work on the Afungi LNG plant
which had been suspended since January 2021 aftera series of insurgent attacks on the complex.78 During
the Palma attack, there were 800 soldiers protecting
TotalEnergies workers at the Afungi site, while there
was only a handful of security protecting the people
in the town79, leaving local people unprotected and at
the mercy of the attackers. Even though Palma wasa known target, no emergency plan was in place.80
On the 26th of April 2021, TotalEnergies declaredforce majeure on the Mozambique LNG projectand confirmed it had withdrawn all staff from theconstruction site because of the escalating violence.81
Up until now, the company has not returned 82 but thecompany intends to restart operations in 2022.

Despite the violence andthe precarious situationin the Cabo Delgado,
the gas development,
including the forced
resettlement, continued
between 2017 and 2021.

FUELLING THE CRISIS IN MOZAMBIQUE | 21

In 2021, Amnesty International reported:
Al-Shabaab’s abuses have been horrific. The group’s
fighters deliberately kill civilians, burn villages andtowns, and commit heinous acts of violence with theirmachetes with such regularity that residents use two
separate words, “beheaded” and “chopped,” to differentiate between the methods of murder; the first is abeheading, the second a quartering, as one would cut
apart an animal being butchered. Fighters have also
abducted young women and children, including girls
as young as seven.83
The violence and the conflict in Mozambique affectwomen and girls in different ways than it affects men
and boys. Women and girls have been abducted by the
insurgents to become wives and concubines and to
do chores like cooking and cleaning. The government
forces seem unable to protect women and girls fromthis kind of sexual and gender-based abuse. Even
worse, the government forces are known perpetratorsof abuse themselves (see below).

Government response
The Government’s response to these attacks has led
to further human rights abuses. Government forces
have detained and tortured journalists for covering
events in Cabo Delgado and subjected civilians
suspected of supporting the armed group to searches,looting, and arbitrary detention. According to Amnesty
International, government forces have conducted
extrajudicial executions, committed acts of torture andother ill-treatment, and mutilated the bodies of their
victims. JA! found that some resettled community
members accuse the military of extorting people for
their compensation money. There are also widespreadreports of Mozambican government soldiers raping
and sexually assaulting women and girls, although thegovernment has repeatedly denied any human rights
abuses.84
Violence is also perpetrated through private security
forces hired by the government of Mozambique. For
example, after security forces, such as the Russian
Wagner group85, lost a number of battles in 2019, thegovernment hired a South African private militarycompany called Dyck Advisory Group (DAG) to fightthe insurgents using armed helicopters. According to
53 witnesses interviewed by Amnesty International,
DAG has fired machine guns from helicopters anddropped hand grenades indiscriminately into crowdsof people in 2021, failing to differentiate between civilians and military targets.86
In August 2020, as the insurgency was coming closer
to the Afungi LNG Park, TotalEnergies signed a security agreement with the Mozambique government.
Under this agreement, TotalEnergies would provide
funding and logistical support for a Joint Task Forceof Mozambican forces that would be defending the
project. Reportedly, the agreement has been linked tocorruption cases, where generals in Maputo would betaking funds that were meant to pay the troops at the
project site.87

Among the local population, there is a general sensethat the government wants people to move out of theCabo Delgado to make space for gas extraction andmining for other natural resources, such as precious
stones, heavy sands and gold. In all cases the local
population is not benefitting from these resources. In
February 2021, CSOs interviewed displaced people toget their perspective on the situation.88 They state:‘It is the contention of many of the InternallyDisplaced People (IDPs) interviewed for this reportthat they are being displaced so that their land canbe given to either multinational companies or the
local elites. Academic and researcher Yussuf Adam
said that displaced people told him, the objective is“serving to exile them from their lands without paying
them compensation.” Locals from the north of Cabo
Delgado have consistently said that the narrativeof “Islamic Jihadism” is a smokescreen – that thereal agenda is to drive them off their land, so thatthe land can be given to prospectors and investors.
Their suspicions are not without justification. A map
released by the Mozambican government89 shows thatthe entire Cabo Delgado (except for nature conservation areas) as well as the entire Nampula Province(with the exception of the areas around Nampula City)
has been given to prospectors and investors.’

Militarization of Cabo Delgado
The Mozambican government called upon the international community for support to manage thesituation in Cabo Delgado. The US and the European Union (EU), through the former colonial power
Portugal, helped with training Mozambican soldiers.90
91
Reportedly, former British SAS fighters have trained
Mozambican forces in the coastal city of Nacala(Nampula province).92 As of the 15th of July 2021, theSouthern African Development Community (SADC)
got involved ‘to combat terrorism and acts of violent
extremism’ in Mozambique. Troops from Angola,
Botswana, Democratic Republic of Congo, Lesotho,
Malawi, South Africa, United Republic of Tanzania andZambia, counting up to approximately 750 people93,
are working with the armed forces of Mozambique.94
Days before SADC’s involvement, on the 9th of July
2021, Rwanda committed to sending 700 soldiers and
300 policemen to support the Mozambican troops.95
Together, the foreign troops and Mozambique’s army
have been able to reclaim significant territory fromthe insurgents, but this is unlikely to resolve theconflict stemming from deeper local grievances.96
Despite all the international involvement, the security situation remains problematic, with violence
being reported both from insurgent groups, government forces, private security forces and international missions. Even though most of the violence isperpetuated by insurgent groups, it is important tonote the multitude of perpetrators of violence and themany ways that civilians are violated and then denied
access to justice and accountability. The Investigative
Journalism Centre, Mozambique, notes that ‘Understanding this is fundamental to unlocking some of the22 | IMPACTS OF LNG PROJECTS IN MOZAMBIQUE‘push’ factors that drive local communities to support
insurgent groups.’97

Humanitarian disaster and refugees
Since the start of the conflict in 2017, at least 750,000
people have been displaced to escape from theviolence and this number is likely to grow to 1 million
people in June 2022 according to the UNCHR.98 Thereis an urgent need for food, shelter, health services
and protection, both for refugees as well as for people
staying behind. In 2021 it was estimated that approximately 1.3 million people in Cabo Delgado needed
urgent humanitarian assistance and protection.99
Most of the displaced people sought refuge within theprovince or in the neighbouring provinces of Niassa
and Nampula, but some also crossed the borders to
Tanzania and Malawi. They stay at refugee camps,
resettlement camps or with family and friends. The
camps are overcrowded, primitive, lack privacy, andoffer limited access to decent water and sanitation
facilities and other basic services. People who arestaying with family and friends are often contributing
to increased poverty when already meagre resources
are shared with more people. Refugees crossing theborder to Tanzania or Malawi often face rejection andhuman rights violations, like pushbacks100, because
they are labelled as terrorists.101
Women and girls on the run are vulnerable for sexualand gender-based violence, and risk other disadvantages that will negatively affect them long term. For
example, girls in camps are out of school and are likely
to be forced into marriage or prostitution to support
the family. The practice of trading sex for foodassistance is on the rise and further aggravates theviolence perpetrated against women and girls.102

Freedom of Press and Civic Space
Press freedom is under very serious pressure in
Mozambique and has worsened since 2015. Accessing
the north of the country, where the LNG projects are,is virtually impossible for journalists without riskingarrest according to Reporters Without Borders.103
Several journalists covering the Cabo Delgado
conflict and its connection to the gas sector havegone missing, or faced torture, arrests and detention
without charge.
In 2019, journalist Amade Abubacar from Nacedje
Community Radio was arrested, tortured and arbitrarily detained for three months without charge, after
interviewing a group of displaced people. Amnesty
International reported that he was ‘being subjected to
ill-treatment, including denial of food, family visits andmedical treatment.’ 104
In March 2020, journalist Matias Guente at Mozambican newspaper Canal de Moçambique, wrote that
Anadarko had paid the government to deploy more

soldiers to the area to protect its interests, and that
this money went into the pockets of the then Ministerof Defense. Three months later, Guente and thepaper’s executive director were charged with ‘violationof state secrecy’ and ‘conspiracy against the state’.
Two months after that, the newspaper’s offices were
petrol bombed.
In April 2020, Ibrahimo Abu Mbaruco, a journalist
at Palma Community Radio in Cabo Delgado, disappeared on his way home from work. Shortly prior to his
disappearance, he sent a text message to a colleague
saying that he was surrounded by soldiers. Reporters
Without Borders and 16 other press freedom organisations wrote an open letter105 to President Filipe Nyusi
and military and government officials, requestingthem to investigate Mbaruco’s case. None of them
responded. One month earlier, another local journalist,
Roberto Abdala, had disappeared in the same region.
Nothing has been done by the government to findeither of them.
In addition, JA! and Civicus indicate that the spacefor civil society has been shrinking as the security
situation worsened. JA! reports that there have been
instances when outspoken community members havedisappeared or have been threatened. In the mostrecent Universal Periodic Review (UPR) process ofthe Human Rights Council, the authorities denied
CSOs and journalists access to work in and reportfrom areas affected by the armed insurgency in Cabo
Delgado and neighbouring provinces.106

Addressing the roots of the conflict
Any attempt to find a successful solution for the
conflict and the insecurity in the region, should
address the root causes for the insurgencies, insteadof only bringing more military and private security
forces. Studies of violent extremism show that poverty,
unemployment, state violence, political dissatisfaction and the presence of valuable resources are fertile
ground for recruiting disaffected parts of the population into fundamentalist groups. The insurgencies in
Cabo Delgado are rooted in systemic and structural
poverty and widespread social, economic and politicaldissatisfaction among the population, and particularly
the youth.107‘The communities of Cabo Delgado have lived with afeeling of abandonment and marginalization by thestate since colonial times, and that feeling continued
after independence.’João Feijó, researcher at the Rural Environment
Observatory (OMR)
The currently unaddressed humanitarian crisis thatevolved from the conflict, as well as the violence
perpetrated by government forces and private security companies, further fuels the insurgencies. If theseissues fail to be addressed, the conflict will continue
to escalate.108

FUELLING THE CRISIS IN MOZAMBIQUE | 23

Any sustainable solution will require a comprehensive, long-term strategy that looks at all aspects that
contributed to the social breakdown, and includes themeaningful participation of the local population. The
problems in Cabo Delgado are so deep-rooted andhave escalated to such an extent that a short-term
solution is unrealistic. At the moment, no start has
been made on finding a sustainable solution.

Economic issues: Lack of economic
development for Mozambique‘A development model based on the extractive sector
is a model that leads to collapse for poor countries
with weak governance. It’s a model that creates few
jobs, leaves the economy undiversified, and produces
an industrialization effect that is minimal. The
majority of the population continue to live off subsistence farming, while watching the elite get richer—a
perfect recipe for armed revolt. What sets Mozambique apart is that it has been acting out this scenario
even before the LNG exploitation has begun. It simply
does not have the governance to avoid the pre-source
curse.’109
Thierry Vircoulon, Institut Français des Relations
Internationales (May 2021)

Lower revenues
After the first discovery of the large gas fields innorthern Mozambique, the projected gas revenues
have become central to Mozambique’s development
strategy. Gas production and exports were expectedto spur widespread industrialisation, fund public
investments and pay down debt. TotalEnergies stated
the following on their website, after they acquired
Mozambique LNG: The Mozambique LNG project islargely derisked since almost 90% of the productionis already sold through long-term contracts with key
LNG buyers in Asia and in Europe. Additionally, theproject is expected to have a domestic gas component for in-country consumption to help fuel future
economic development.110
However, already in 2016, the International Monetary Fund (IMF) warned that ‘although the economic
potential emerging from the projects is tremendous,
macroeconomic and fiscal implications are quitesensitive to international commodity price developments and other risks factors, highlighting that the
government’s authorities would be well-advised intaking a cautious approach’.111 Currently, the ‘gas fordevelopment’ story is failing. The economic benefits
failed to materialize due to the conflict, corruption,
debt and tax issues which prevent the Mozambican
government from benefiting from the projects. In
addition, most of the projected profits will be kept
offshore, benefiting the foreign companies involved,
and revenues will be used to pay down debts insteadof using them for development.
In June 2018, the Instituto Nacional de Petroleo (INP)As European
governments try to getaway from imported
Russian gas, they may
want to increase importfrom Mozambique,replacing one conflictfor another, insteadof diversifying to
renewable sources andinvesting in energy
efficiency.

24 | IMPACTS OF LNG PROJECTS IN MOZAMBIQUE

projected the country's share of revenues from both
Area 1 and Area 4 to reach $49.4 billion over the lifeof the projects, with revenues increasing significantly
after 2033. However, Open Oil analysis in 2021 estimated both projects will generate only about 40% of
this amount – about US$18 billion - and 70% of thatwill only come after 2040. Open Oil calculated that
the LNG projects in Mozambique result in much lower
revenues for Mozambique than expected and thatbillions are lost through special purpose vehicles in
Dubai, exempting the companies involved from paying
taxes on dividend and interest that would otherwise
be at the rate of 20% in Mozambique. These exemptions reach $5.3 billion for the Mozambique LNG and
Rovuma projects alone. The stake of the Empresa
Nacional de Hidrocarbonetos (ENH, the State’s oil andgas company), projected to be worth $1.1 billion, isvirtually worthless because of the high project costs/
debts and lower revenues of the projects and could
be a liability for the government. In 2021, Open Oil
concluded that most of Mozambique's gas is alreadypotentially stranded.112
In addition to this, Centro Integridade Pública (CIP),113
a Mozambican NGO that deals with transparency,
corruption and the budget of the Mozambican government, has expressed various concerns about the
fiscal context of the Mozambican LNG projects. For
example, in the contract with Anadarko, a 25% tax
reduction on profits in the first 8 years was agreed.
Making things worse, there are serious doubts
about whether the Mozambican government has thecapacity to audit the tax return of the companies
involved.114
In general, the future of gas is looking less optimistic than expected due to changing global climate
and energy policies and rapidly declining costs forwind, solar and batteries.115 However, gas prices are
known to fluctuate under the influence of international developments, which we have seen over thelast months. Gas prices increased strongly as a resultof growing demand and the Russian invasion in the
Ukraine. As European governments try to get awayfrom imported Russian gas, they may want to increaseimport from Mozambique, replacing one conflict foranother, instead of diversifying to renewable sources
and investing in energy efficiency. Still, even if demand
for gas and gas prices increase, it is highly unlikelythat Mozambique or the people in Cabo Delgado will
benefit from the LNG projects.

Corruption
The ‘gas for development’ story is also damaged by alarge ‘hidden debts’ corruption scandal that resulted
in the IMF and international donors, including theNetherlands, to withdraw direct financial support tothe country in 2016, triggering an economic crisis.116
In the so-called ‘Tuna-bonds Scandal’ European andRussian banks, audit company Ernst and Young117, a
middle-eastern business man and corrupt Mozambican officials arranged 2 billion USD in secret loans(equivalent to 12% of GDP) without approval of theMozambican parliament in 2013. The loans weremeant for maritime security and the tuna fishingindustry but millions in bribes and corrupt payments
were siphoned off by officials and the projects havedelivered no benefits to Mozambique. Even though
this crisis is not a direct result of the gas discoveries
a few years before the scandal, it was likely influenced by the expectations that the gas revenues could
repay the loans. This assumption is substantiatedby the fact that parts of the bonds were used to buy
military equipment, that were meant to protect thegas reserves.118 This is called the ‘pre-source curse’
effect: an increase of debts, corruption and instability
following the finding of oil and gas resources, even
before production is taking place.
The pre-source curse is still continuing as the gas
projects are delayed and debt is increasing as longas no repayments are being made.119 Ultimately, it
is Mozambique that will financially suffer from theforce majeure, not the industry. According to the
IMF, Mozambique will not be able to make paymentson these loans for decades.120 This massive debt isholding Mozambique hostage to the corporations andfinanciers exploiting the gas and keeps the country
dependent on potential revenues. Once revenues fromthe gas exploration will occur, it is likely that priority
will be given to repay holders of government bonds
instead of implementing development policies.

Lack of benefits for citizens
The exploitation of the gas fields was not only
promoted for government revenues but also for wider
economic development, benefiting the local population. The gas would industrialize Mozambique andincrease access to energy. There is a high need forenergy access as 70% of households in Mozambiquelack electricity. The gas projects were expected tosupport local businesses and jobs, while earnings fromthe project could be re-invested into other promising
sectors such as agriculture and tourism.121 In 2016it was decided that 2.75% of the tax on production(imposto de produção) should be allocated to thedevelopment of communities in the areas where theprojects are located. Whether or not the population
will benefit from the gas revenues therefore also
depends on the capacity of the Mozambican government to control the companies’ tax declarations, whichis questionable.
Currently, it seems unlikely that the population will
be benefiting at all from the gas production, quite
contrary, with hundred-thousands of InternallyDisplaced People (IDPs), people’s lives and future
perspectives have actually gotten worse. In Cabo
Delgado, community members were promised employment, but the jobs did not materialise except for asmall number of temporary and unskilled jobs, suchas cooking, cleaning and construction work in theAfungi Park. Most of these jobs disappeared after theforce majeure. In addition, the force majeure had alarge impact on local businesses that depended on theindustry as well as resettled communities that are stillFUELLING THE CRISIS IN MOZAMBIQUE | 25

waiting for compensation. Income that local communities were getting through the growing tourism sector
in the area has evaporated. Also, energy access has
not increased which is partly because only 12% of thegas extracted in the Mozambique LNG project will
be used in Mozambique, predominantly by industries
and businesses linked to the gas sector, and partly
because the gas investments are standing in the wayof developing decentralised renewable energy projects.122

Conclusion
The LNG projects in Cabo Delgado, Mozambique, havea long list of harmful impacts on the people and theenvironment, both on land and on the ocean. The projects have led to forced resettlements and the further
deterioration of economic hardship. In addition, theprojects fuelled a violent conflict, insecurity, displacement, human rights violations and a deadlocked
humanitarian crisis. On top of this, the projects willcontribute to the further worsening of climate change
and related climate disasters, bring no development toMozambique and stand in the way of a just transition
to renewable energy.
All these negative effects come as no surprise.
Research and past experiences in other countries andregions largely predicted the current problems andlong term effects, yet, no measures were taken toprevent or mitigate these effects.

E

III
ECA
SUPPORT
FOR LNG IN
MOZAMBIQUEECA funding for LNG in Mozambique

FUELLING THE CRISIS IN MOZAMBIQUE | 27

The LNG projects in Mozambique are supported
through credit, loans, insurances and guarantees
provided through a high number of Export Credit
Agencies (ECAs). In this chapter we will focus on
support provided by ECAs from France, Italy, theNetherlands, the UK and the US, and review thedecision making processes that led to supporting LNG
projects in Mozambique. ECAs of Japan, Korea, China
and South Africa are also supporting the LNG development in Mozambique.123
All 5 countries reviewed are participants of the‘Arrangement of Officially Supported Export Credits’of the OECD, in which rules and guidelines are agreed
that provide a framework for the use of officially
supported export credits. The ‘Arrangement’ cameinto effect in 1978. It is a Gentlemen’s Agreement, not
an OECD Act, and therefore not legally binding. Yet
the implementation of the Arrangement is regularly
monitored by the OECD. The Arrangement sets forth
the most generous export credit terms and conditions that may be supported by the participating
ECAs. It includes a section on assessing country risks
according to the likelihood of whether they will service
their external debts. Country risks encompass transfer
and convertibility risks and cases of force majeure(e.g. war, expropriation, revolution, civil disturbance,
floods, earthquakes). In addition, the OECD council
adopted the Recommendation of the Council on
Common Approaches for Officially Supported Export
Credits and Environmental and Social Due Diligence(the ‘Common Approaches’) in 2012 and its revised
text in 2016. Amongst other non-legally binding
recommendations, the Common Approaches recommend that ECAs should:
1. Encourage the prevention and the mitigation ofadverse environmental and social impacts of projects and the consideration of environmental andsocial risks associated with existing operations andtake into account the benefits of any projects andexisting operations supported, thereby enhancing
the overall financial risk assessment process.
2. Undertake appropriate environmental and social
reviews and assessments for projects and existing
operations respectively, as part of their due
diligence relating to applications for officially
supported export credits.
3. Encourage protection and respect for humanrights, particularly in situations where the potential
impacts from projects or existing operations poserisks to human rights.
4. Foster transparency, predictability and responsibility in decision-making, by encouraging disclosureof relevant environmental and social impact information, with due regard to any legal stipulations,business confidentiality and other competitive
concerns.
Lastly, ECAs are subject to their own (corporate social
responsibility) policies and national laws and regulations, which includes, for example, ensuring that thefinancial investments are not jeopardizing the goalsof the UNFCCC Paris agreement or the Sustainable
Development Goals (SDGs).
To gain insight in the ECA decision making process
for LNG projects in Mozambique, NGOs in the Netherlands, the UK, France, Italy and the US used various
ways of obtaining documentation on decision making
processes, including FoI requests. Despite therecommendations and policies mentioned above, theinvolved NGOs have not been able to confirm thatthe decision-making processes to approve the ECA
support for natural gas projects in Mozambique wasbased on proper assessments of risks and mitigationplans.

Incorrect assessment of climate impact
The UNFCCC Paris agreement that was signed in 2015
in Paris is a legally binding treaty to combat climatechange. All signatories to the Paris agreement commit
to limiting global warming to a maximum of 2˚C and to
pursue 1.5˚C. In 2018, the IEA calculated that to staywithin the 1.5 degrees scenario there is no space for
new fossil power plants.124 National governments are
required to develop laws and policies in line with thegoals of the Paris Agreement and ‘make finance flows
consistent with a pathway towards low greenhousegas emissions and climate-resilient development’.125
This would include developing climate policies for
public finance institutions like ECAs.126 However, so far,support by ECAs seem to be directly opposed to whatis needed. A study by Oil Change International andFriends of the Earth US estimated that in 2019 and2020 the ECAs of G20 countries provided an annual
average of $40 billion to support fossil fuel projects,
making them one of the biggest driving forces of(new) fossil fuel projects.127
Consultancy agency Wood Mackenzie assessed theclimate impact of the Mozambique LNG project128 but
instead of using a 1.5˚C scenario the consultancy firmused a 2˚C scenario. This is not in line with the Paris
commitment, in which governments agreed to keep
global warming well under 2˚C and aim for 1.5˚C. Wood
Mackenzie also did not take into account scope 3
emissions that would come from the project. Scope 3
emissions are of crucial importance though, because
they include the end use of the product: the burning of
LNG for energy, when most emissions take place. The
consultancy agency claimed to be unable to measurethese emissions, yet, there is an international standard available since 2011.129 Still, the Wood Mackenzie
report was used to approve the financial commitments
made by the ECAs in the Netherlands and the UK andpossibly other countries and financiers as well. The
Environmental Impact Assessment (2016) of the Coral
South FLNG project concludes that the greenhousegas emissions of FLNG can be assessed as ‘negligible’.
130
This assessment also lacks scope 3 emission calculations as well as calculations for fugitive (methane)emissions. In other words, ECAs have based theirfinancial support on an incorrect climate impact

28 | ECA FUNDING FOR LNG IN MOZAMBIQUE

assessment.
In addition, the justification for investing in this large
natural gas project is based on the incorrect assumption that gas is a harmless ‘transition fuel’, contrary
to the latest climate science insights. For example,
the documents received through the FoI request in
the Netherlands showed that the Dutch ECA ADSB
advised the Dutch government that gas is a transition
fuel and even stated that the Mozambique LNG projectis good for the climate by assuming that the gas will
possibly replace the burning of coal, for example inAsia. However, this claim cannot be substantiated,
and recent scientific insights show that fossil energy
use worldwide (and their emissions) will only increase,
despite increased investments in natural gas.131 Even
Wood Mackenzie stated that it cannot provide adefinitive assessment on the emission reductions thatwould result from the Mozambique LNG projects. It
is highly unclear and questionable why and how thisflawed climate argumentation led to the approval of
financial support for the project.

Climate court case in the UK
Friends of the Earth EWNI is battling the decisionof UKEF to support Mozambique LNG for 1.15 billion
USD in court on two grounds related to the project’s
climate impact:
1. the decision was made on the incorrect basis thatthe project was consistent with the UK and/or
Mozambique’s commitments under the Paris Agreement;
2. the defendants failed to consider essential issues
or carry out the necessary analysis to properly
determine if supporting the project aligned with the
UK’s and Mozambique’s obligations under the Paris
Agreement.
On the 16th of March 2022, the court ordered the caseto be sent to the Court of Appeal, as two High Court
judges failed to agree on the case. Justice Thornton,
one of the two judges who heard the case, agreed
with FoE EWNI’s assessment that the decision to
support the project, was granted without a complete
understanding of its climate impacts. She concluded
that there was ‘no rational basis’ to show that thefinancing of the project was consistent with the termsof the Paris Agreement and international ambitions tolimit global temperature rise to 1.5˚C. According to her,
its approval was therefore unlawful.
She ruled that the direct correlation between greenhouse gas emissions and increase in temperaturemeans that the reference in Article 2(1)(c) to “lowgreenhouse gas emissions” must be understood byreference to the temperature goal in Article 2(1)(a).
Thus, the provision of finance must be consistent witha pathway towards holding global warming to well
below 2°C above pre-industrial levels and pursuingefforts to limit warming to 1.5°C. Flows of finance are
therefore a core element in meeting the temperaturegoal. This is the first time that temperature (Article
2(1)(a)) and the finance goals (Article 2(1)(c)) of theParis agreement are explained and linked in a court
ruling and it represents a major breakthrough.
Even though the split decision means that the judicial
review did not yet succeed, the conclusion of JusticeThornton is promising for the case on the Court ofAppeal as well as for similar cases in other countries
to challenge the lawfulness of ECA support for LNG in
Mozambique and other fossil projects. The final verdict
is expected in the second half of 2022 or early 2023.
Our claim that the government’s export credit agency
acted unlawfully has today been vindicated by aHigh Court judge, but UK Export Finance has been let
off the hook on a technicality, for now. Our fight forclimate justice means that an appeal is now inevitable, and we remain confident of success in lightof the compelling findings clearly laid out by JusticeThornton.
In the meantime, there are big questions for UKEF
and for the government on whether it can feasibly still
support this project when a judge has plainly said thatits funding cannot rationally be considered compliant
with the law. This case has shown that making poor
decisions at the expense of our planet’s future leaves
the government increasingly vulnerable to climate
litigation.
Will Rundle, head of legal at Friends of the Earth EWNI

Gas lock-in undermines a Just Transition
The large investments in new fossil fuel projects
are not only contributing to increasing greenhousegas emissions, but are at the same time slowing
down investments in renewables that the world sodesperately needs. Research shows that new gas
infrastructure locks in emissions for the long term.
Multibillion-dollar gas infrastructure is designed
to operate for decades to come, not to transition
quickly to renewables. Given the barriers to closing
down infrastructure ahead of its expected economic
lifespan, it is critical to stop building new fossil infrastructure. As long as fossil fuels are delivering energy,
investments in renewables lag behind, and the Paris
goals get further out of sight.132
This is even more troublesome knowing that Mozambique has very high potential for renewable energy.
The country consistently presents a high level ofsolar radiation throughout the year, making off-grid
solar power an increasingly cost-effective option forrealising full electrification, especially in rural areas
currently deprived of energy access. Thousands ofpotential sites for solar energy have already been
identified across the country by the Ministry of
Mineral Resources and Energy.133 Mozambique also has
favorable conditions for wind energy along the coastand in the highlands. The falling costs for solar andwind technologies open the possibility for renewables
to increase energy access for people and businesses,
and even to export excess electricity to neighbouring

FUELLING THE CRISIS IN MOZAMBIQUE | 29

countries.134 Decentralised, off-grid renewable energy
is more sustainable and more resilient against climate
impacts than fossil fuels. To date, however, renewableenergy has received only a fraction of the focus andfinance of the gas projects. The total international
support for all renewable energy projects in Mozambique is $230 million USD – one-sixtieth of the publicfinance provided to the Mozambique LNG project
alone.135
The undermining impact of continuous fossil development on Mozambique’s renewable energy potential
seems to not have been taken into account by the
ECAs supporting LNG development in Mozambique.
Already in 2018, three years before the Dutch ECAADSB approved the Mozambique LNG support, theNetherlands Enterprise Agency, published a report onenergy in Mozambique which pointed out that Mozambique possesses an enormous potential for renewable energy, but that the development of renewable
resources has been hindered in the last two decades
by the country’s dependency on fossil fuels.136

Unclear and inconsistent assessment ofenvironmental and social impacts, including
security
Although some information and documentation on
ECA decision-making was retrieved through FoI
requests, one of the key documents that informs
decision making is still not publicly available: The Environmental and Social Action Plan (ESAP). The ESAP isa ‘living’ document that describes the environmental
and social mitigation and monitoring measures andcriteria and organisational measures to be implemented during the pre-construction, construction andoperation of the projects. It is not only an essential
document for ensuring that the projects comply toenvironmental and social compliance requirements,
but it is also crucial for the local population to have a
say in how to manage the effects of the project.
There have been numerous warnings, particularly
by Civil Society Organisations (CSOs), about themassive impacts of the LNG projects on the environment, including on vulnerable ecosystems, andthe communities in the Cabo Delgado, as well as thelikelihood that a highly inflammable social situation
would get further out of hand, but it is unclear how
ECAs assessed these impacts. The project is classified as a Category A, high-risk, project according to
the OECD Common Approaches. Category A projects
include pipelines, terminals and associated facilities
for the large-scale transport of gas, oil or chemicals.
Documents disclosed through the Dutch FoI process
revealed an assessment of the environmental andsocial aspects that was used for the approval, butfailed to disclose the required ESAP. The assessment
document acknowledges and lists many adverse
impacts and refers to several Environmental Impact
Assessments (EIAs). Yet, these EIAs are not included
nor are the planned mitigating measures. The document states that the lenders were still working on

finalising the ESAP. Despite these omissions, theassessment concludes that the negative environmental and social impacts can be mitigated bymeasures to an acceptable level and that the projectwill be able to meet international standards by thetime construction starts.
Moreover though, the safety situation has been highly
problematic ever since the first insurgencies in 2017
and the occurrence of severe human rights violations
as well as large-scale displacement were well known
ever since. Yet, these warnings have been largely
ignored and no proper documentation of risk assessments or security plans have been made publicly
available by the ECAs involved. For example, theExport-Import Bank of the U.S. (US EXIM) decided tolend the $4.7 billion to Mozambique LNG despite evenits own analysis that warned about security risks.137
Mozambique presents a rapidly evolving security
dynamic with an equally challenging physical risk
scenario. The security environment is highly variable,
security threats and risks to the project will evolve
rapidly, and the situation is likely to worsen before it
improves.
Taken from EXIM’s Due Diligence documents required
by Friends of the Earth US through a FoI request.
In the Netherlands, the advice from the Dutch
Embassy clearly noted that 'The security situation isin fact deteriorating by the day, a risk that is underplayed in ADSB's underwriting proposal'. The Embassy
also indicated that it had serious doubts about thecapacity of the Mozambican troops to keep the situation under control. Despite this, no adequate safety
analysis and mitigation strategy and plan were foundin the FoI documents. The Dutch Ministry of Foreign
Affairs (May 2020) indicated in its letter to request
approval of the ECA support that ‘the businesses
involved consider the safety risks to be acceptable,
thanks in part to extensive safety measures on andaround the project site, led by TotalEnergies and theMozambican government’. Still, the same letter notesthat ‘There are also reports of brutality and humanrights violations by the Mozambican army and police
in the region’ but that seems to carry less weight thanthat ‘the project offers great opportunities for the
NL business community’. In December 2018, ADSB
could not visit the project due to the security situationand had to resort to flying over the project site in ahelicopter. Even more astounding is that the approvalof the 1 billion USD insurance policy (25 March 2021)
was given one day after the extremely violent attack
on Palma town (24 March 2021). In December 2021 theDutch government agreed to an independent investigation to this approval after the FoI documents led to
Parliamentarian questions.

Lack of assessment of economic impact,risks and corruption
Mozambique is one of the poorest and most heavily
indebted countries in the world.138 Deeply intertwined with the safety and security situation are the30 | ECA FUNDING FOR LNG IN MOZAMBIQUE

economic situation and corruption issues in Mozambique. Already in 2016 and 2017, international donors
including the IMF ended their development aid to theMozambican government following the Tuna bonds
scandal. Corruption is a well-known high risk forinvestments in Mozambique and it is unclear how
ECAs assessed and mitigated this risk ahead of theirfinancial commitments. For example, in March 2017,
Dutch Minister Ploumen of International Development
Cooperation stopped Dutch development support
to the Mozambican government, yet the Dutch ECAADSB approved its support to LNG projects in Mozambique in 2021. The OECD Arrangement requires its
participants to assess country credit risks, which
includes the risk of force majeure. Mozambique has
been assessed to fall in the highest risk category(rated 7 on a scale of 0-7) non-stop since July 2015.139
Also the IMF indicated in 2018 that Mozambique would
not be able to make payments on its debts for another5 years.140 Yet, this did not stop ECAs from providing
export credit support.
The gas extraction and LNG production projects arepresented as an essential opportunity for Mozambique
to lift the country out of poverty and debts. However,there are no grounds that justify the ‘gas for development’ assumption in a context where most of thegas will be exported, energy multinationals take mostof the profits and the local population is not only notbenefiting from the projects, but even losing theirhomes, livelihoods and security. The income fromthe project may possibly mitigate Mozambique's
growing mountain of debt, but it may also increase
it, especially because most of the revenues for the
Mozambique will only come after 2040.141 The needfor stability that is required for a successful projectand emphasised by the IMF is directly opposed to
the growing instability in the region. In addition,energy companies have been operating in Mozambique for many years, but with no visible benefit to
the economy and local people. For example, Sasol’s
Pande and Temane projects in Inhambane have been
producing gas for 14 years, the majority of which issold to South Africa. These projects have created few
permanent jobs for the local population, which has led
to protests of young men demanding job opportunities.142 The available ECA documentation provide no
proper assessment of the economic impact and risksof the LNG projects nor on (the risks of) corruption in
Mozambique.

Lack of transparency
For all ECAs reviewed for this publication, it has been
largely unclear why and how the decisions to support
LNG projects in Mozambique were taken. This information is not published by default and important
documents are not shared, even though the financial
commitments are made with public support and theOECD ‘Common Approaches’ recommend transparency and disclosure of relevant environmental andsocial impact information. The FoI requests that weredone by Friends of the Earth groups and other CSOs

Multibillion-dollar
gas infrastructure isdesigned to operate for
decades to come, notto transition quickly torenewables.

The OECD Arrangement
requires its participants
to assess country credit
risks, which includes therisk of force majeure.
Mozambique has beenassessed to fall in thehighest risk category(rated 7 on a scale of0-7) non-stop since
July 2015

FUELLING THE CRISIS IN MOZAMBIQUE | 31

take a long time and have not yet resulted in full
disclosure.

cases in other countries if they don’t align their publicfinance support to international climate goals.

In the Netherlands, the FoI process was slow and filledwith hurdles. The NGOs involved had to start legal
procedures to demand the requested documents.
More than a year after the request was filed, key documents, like the ESAP, have still not been made public.
In the UK, the financial support for Mozambique LNG
was one of the largest financing packages ever offered
to a fossil fuel project by UKEF. Despite this, andthe fact that there was large controversy around thenature of the project at the time of a climate crisis,
the Prime Minister was reportedly ‘bounced’ into it anddecision making process was shrouded in secrecy.143
FoE EWNI could not get access to key documents,
including the Wood Mackenzie climate assessment
and was only able to review the powerpoint presentation that was retrieved through the Netherlands’ FoI
request. Also in France, Italy and the US there is little
transparency on decision making within BPI France,
SACE and US EXIM.

In addition to global warming, the projects have amajor impact on the environment, human rights,
violent conflicts in the region and social and economic
disruption. All these risks and related impacts were
known before the financial commitments were made.
It is therefore incomprehensible and extremely irresponsible that over $9 billion in public support has
been pledged from the five countries we investigated
for this report. The countries and ECAs involved
must take responsibility for their contributions tothe crisis in Mozambique and the projects’ climate
impact by immediately withdrawing their support
for the projects and address the consequences thathave emerged as a result, ensuring compensation andreparations.

Corporate interests take precedence overpeople, the environment and the climate
The fact that the environmental and climate risks,
the security situation, human rights, corruption andthe lack of development opportunities have all beensystematically ignored or downplayed in the decision making process clearly shows that economic
interests of companies are placed above people, theenvironment and the climate. The legally non-binding
recommendations of the OECD Arrangement andthe Common Approaches have been systematicallyignored during the decision-making processes. Even
more worrisome is the fact that even binding laws andregulations, such as commitment to the Paris agreement, seem to get bypassed and accountability issystematically undermined by a lack of transparency.
Ultimately, this system in which corporate interests
are valued over people and the planet will backfire, as
is already happening in Mozambique with the escalating situation on the ground, leading to death andsuffering, displacing hundreds of thousands of people
and locking the project into a force majeure. However,
the world has no time to wait for the system to correct
itself and for the climate crisis spinning out of control.
It is in everyone’s interest to ensure a fairer systemsooner rather than later.

Conclusion
The findings in this chapter show that ECAs' approvalof financial support for the LNG projects in Mozambique was not only based on wrong assumptions but
was also not in line with key international and national
standards for public funding. The conclusion of JusticeThornton in the litigation of FoE EWNI against UKEF
shows that continued support for fossil fuels cannot
be justified much longer. ECAs risk similar court

IV
PHASINGOUT
FOSSILSUPPORT

Phasing out fossil investments
FUELLING THE CRISIS IN MOZAMBIQUE | 33

If the world still wants to have any shot at achieving
the climate goals laid out in the UNFCCC Paris
Agreement in 2015, phasing out fossil fuels rapidly isabsolutely crucial. To successfully limit global warming
to 1.5°C, dramatic and unprecedented action, starting
immediately, is needed. The IPCC report of February
2022 does not only show that too little action is taken
and that the devastating and irreversible effects ofglobal warming are accelerating beyond expectations,but also that climate change is dividing the world in
two: between those who have the resources to survive
failing food systems, perilous heat and rising seas,
and those who don’t.144
The most recent IPCC report of April 4th 2022
concludes that limiting global warming to 1.5˚C is still
possible but the next few years are critical and thatstronger alignment of public sector finance and policy
is one of the urgent interventions needed.145 In thislight, the Mozambique case is a telling example of thislack of alignment and the urgency to change. It shows
how the continued public support for fossil projects
through ECAs undermines the global climate goals aswell as many of the Sustainable Development Goals,
including ending poverty.

Policies to phase out new fossil investments
Since the signing of the Paris Agreement in 2015,
countries have been working on translating theclimate goals to national policies and action plans,
yet overseas public finance for fossil projects remains
unacceptably and dangerously high. In 2019 and 2020,
ECAs from G20 countries provided 40 billion USD tofossil fuel projects, more than 10 times more than the
3.5 billion they invested in renewables.146 However, themomentum to end public finance for fossil fuels has
been building since 2020.
The European Investment Bank (EIB) announced in2019 to end financing for fossil fuel energy projects by
the end of 2021 and focus future financing on accelerating clean energy innovation, energy efficiency
and renewables.147 At the Climate Ambition Summit
on 12 December 2020, UK Prime Minister Boris
Johnson announced the intention for the UK to nolonger provide any new direct financial or promotional
support for the fossil fuel energy sector overseas. He
said:“Climate change is one of the great global challengesof our age, and it is already costing lives and livelihoods the world over. Our actions as leaders must be
driven not by timidity or caution, but by ambition on atruly grand scale. That is why the UK recently led theway with a bold new commitment to reduce emissions
by at least 68% by 2030, and why I’m pleased to say
today that the UK will end taxpayer support for fossil
fuel projects overseas as soon as possible. By taking
ambitious and decisive action today, we will create thejobs of the future, drive the recovery from coronavirus
and protect our beautiful planet for generations tocome.”The most recent IPCC
report of April 4th
2022 concludes that
limiting global warming
to 1.5˚C is still possible
but the next few years
are critical and thatstronger alignment ofpublic sector financeand policy is one of theurgent interventions
needed.

34 | PHASING OUT FOSSIL INVESTMENTS

Following this statement, a consultation process wasstarted to explore how to best make the shift fromfossil investments to investments in clean energy. Civil
society, including from the global South, as well as
oil and gas companies and companies in the supply
chain were engaged in this process. Based upon thisconsultation, the UK government decided to phase out
overseas fossil finance per 31 March 2021.148 This has
been a crucial step in the right direction, even though
there is space for improvement of the policy. CSOs are
critical on the exemptions allowed for gas power, even
if it’s only under exceptional circumstances, and thecoverage of only direct support rather than including
the significant ‘indirect’ investments via major government investment bodies such as Private Infrastructure
Development Group (PIDG) and British International
Investment (BII), which could undermine the effect ofthe policy. For example, UK development finance institution BII supports a gas-fired power plant in Mozambique, known as the Central Térmica de Temane (CTT).
The financial close on the project was announced in
December 2021149, nine months after the decision tophase out fossil finance and just days after the UK
hosted COP26.
The other countries we reviewed for this report
have so far adopted less progressive and comprehensive policies. For example, the Dutch ECA ADSB
made a policy in 2020 that only included the end of
financing for coal, ‘unconventional’ gas exploitation,for example through fracking150, and routine flaring.151
At the end of 2020, France also adopted a climate
plan regarding export finance, which includes ending
support to unconventional oil and gas projects beyond
2021, ending support to oil exploration and production
beyond 2025 and ending support to gas explorationand production beyond 2035. Not only are most ofthese restrictions too far away in the future, they also
don’t apply to transport infrastructures, which meansthat France could still grant guarantees to pipelines,
or even gas liquefaction plants beyond these dates.
FoE US analysed the current US restrictions on publicfinance for overseas energy projects152 and foundseveral shortcomings: Current policy focuses mainlyon power plants with little guidance on midstream
and upstream projects153; allows the U.S. Export-Import Bank to claim an exemption and allows many
exceptions including for national security and energy
access; fails to address financial intermediaries; andfails to improve the accounting of emissions. Overall,there is a need for increased ambition when it comesto phasing out public fossil finance and the realizationof the Paris agreement.
In April 2021, Denmark, France, Germany, the Netherlands, Spain, Sweden and the United Kingdom
launched the Export Finance for Future (E3F) ministerial initiative for climate action. The initiative resulted
in a Statement of Principles aiming at promoting
and supporting a shift in export finance towards
climate-neutral, climate resilient projects and investments.154 Even though the initiative is promoted as animportant step forward, concerned NGOs indicatedthat the principles do not contain new commitments
but reiterate what is being done already and thatthe level of ambition expressed in the principles has
not been materialised in concrete commitments anddeadlines. The NGOs called on the E3F members tofollow the UK’s example by putting an immediate end
to new export finance for fossil fuels.155 This advocacy
paid off when at the end of 2021, the UK launched the
Glasgow Statement on Public Finance at UNFCCC
COP26.

Glasgow Statement on Public FinanceAt the UN climate conference (COP26) in Glasgow inNovember 2021, 34 countries, including the Netherlands, France, Italy, UK and US, and 5 financial institutions, signed a statement committing to redirect theirinternational public support towards the clean energy
transition and out of unabated fossil fuels by the endof 2022, except in limited and clearly defined circumstances that are consistent with a 1.5°C warming limit
and the goals of the Paris Agreement.156
The UK already translated this commitment into
policy and the other signatories to the statement are
currently working on aligning their national laws andpolicies. For example, in November 2021 the Dutch
Secretary of State said: ‘All things considered, thegovernment is committed to ending international
government support for the fossil fuel sector by theend of 2022. … It is important that a transition canbe designed which is feasible, preserves knowledge
and jobs and takes account of the effects on the least
developed countries. The coming year will therefore
be used to achieve a careful implementation with thesectors involved.’ The Dutch Parliament was updated
on the progress in April 2022.157 France and Italy areless transparent about what is happening and whena new policy can be expected. In France, for example,
an expert report about the implementation of the
Glasgow agreement has been commissioned but will
not be made available to the public.
Immediately after the Glasgow conference, themembers of the E3F initiative met again in an online
conference to work together on aligning export
finance towards a sustainable future. Belgium, Finlandand Italy joined as new members of the initiative. The
outcome of the conference focused on the need forincreased transparency and cooperation but did notinclude concrete actions and commitments to ending
fossil fuel investments.158 NGOs responded criticallyand are demanding increased urgency159:
Initiatives like Export Finance for Future and therecent UK-led COP statement on phasing out publicfinance support for fossil fuels have great potential
to contribute to a just, fair and equitable transition.
But a just transition is a transition that is in line withachieving climate goals as informed by scientificresearch – and scientists tell us that we need to take
immediate action to avoid dangerous climate change.
Export credit agencies and governments now need toquickly revisit their export finance policies and alignpolicies with scenarios compatible with the 1.5˚Ctemperature goal. High-level conferences on their own

FUELLING THE CRISIS IN MOZAMBIQUE | 35

are not going to solve the climate crisis – what isneeded is resolute and bold climate action.
Davide Maneschi, Programme Officer Climate Change
at Swedwatch
The United States signed the Glasgow declaration
but are not part of the E3F initiative. After Glasgow,
President Biden circulated a government-wide performance standard for all energy financing overseas,
which has not been made public. Friends of the Earth
US submitted a FoI Request to receive the standard,
which has not yet led to its disclosure. While thecurrent US restrictions on public finance for overseas energy provide for a potentially far-reachingnational security exemption160, US EXIM has declaredthat it remains focused on ‘green’ investments andcommitted to Biden’s climate agenda.
Unfortunately, not all EU Member States undersigned
the Glasgow agreement. However, in March 2022, theEuropean Council approved conclusions on export
finance in which Member States agree to align their
ECA policies with a 1,5˚C scenario and to determine
their own science-based deadlines for ending officially
supported export credits to fossil fuel energy sector
projects by the end of 2023. Even though this is lessambitious that the Glasgow statement which has theend of 2022 as the end date, it is still an important
step in the right direction. The Council also calls for
introducing financial mechanisms that incentivize
environmentally sustainable projects into the OECD
Arrangement.161
It is positive to see efforts by the European Union topush for an agreement on oil and gas at the OECDlevel, however we regret that Member States only
agreed to adopt phase out policies by 2024 when it
is clear we should have stopped fossil fuel expansion
yesterday. We don’t have the luxury of time and halfmeasures.
Anna-Lena Rebaud, Friends of the Earth France

Recommendations to implement the
Glasgow Statement on Public FinanceAt the moment, the Glasgow Statement leaves room
for individual interpretation as to what the agreement means and entails exactly, and how it should
be shaped into effective policy. This could leave
the door open for funding projects that are still
fossil-fuel related and not in line with achieving theclimate goals, which is a tendency that is also visible
in national policies. The fossil fuel related industry
invests millions of USD on an annual basis on lobbying
decision makers and was highly represented at the
Glasgow conference.162 The industry will continue to
use its power to gain support for fossil fuel projects
as long as possible and has no problem going against
scientific research findings and consensus. It is therefore necessary to create more clarity, and not leave
any space for multiple interpretations, about what canand cannot be funded to make a real move towards amore sustainable future and address climate change
effectively.

Civil society groups from around the world have maderecommendations to governments on how to implement the Glasgow statement in line with climate
science. To begin with, it is important to define theterm ‘unabated’ to avoid any misuse or continued
support for fossil fuels. The best way to limit emissions is to avoid creating them in the first place; inother words, putting an end to all new upstream andmidstream oil and gas finance without exception.
Equipping power plants with Carbon Capture andStorage (CCS) or Capture Capture Utilisation andStorage (CCUS) comes with limitations, environmental
health risks and high costs. Renewable electricity
production is already vastly cheaper than fossil fuelelectricity production with CCS or CCUS. Secondly,
countries need to define ‘limited and clearly defined
exceptions’ and ensure that these do not allow forgas lock-in, anywhere in the world. Any new support
to long-lived gas infrastructure, including LNG infrastructure, pipelines, and gas-fired power plants is
incompatible with a just 1.5°C trajectory and should
be excluded from ECA support. Downstream exceptions such as for liquefied petroleum gas for cooking
or heating, and fossil fuel generators in emergency
response settings could be acceptable in rare cases
where renewable alternatives are not viable.
In addition, it is important to avoid an increase indirect support for fossil fuel projects before theDecember 2022 deadline and ensure the commitment
extends to indirect support for fossil fuels, including
policy-based lending, technical assistance, diplomatic
support and investments through financial intermediaries (e.g., private equity funds). Approving new fossil
investments before the deadline and allowing indirect
support for fossil fuels would undermine the effectiveness of the statement. Instead, high-income countries
should codify a substantial and long-term increase
in international support for a just energy transition,prioritizing the low income countries and communities
that are the least responsible for climate change andlikely to be the most impacted as well as those thathave a significant energy access gap.
Once the meaning of the Glasgow statement has beenfurther defined and refined, it is necessary to secure
new members of the initiative. Some of the largest
providers of public finance for fossil fuels (Japan,
Korea, China, and Australia) and most MultilateralDevelopment Banks (MDBs) have not yet signed thestatement, though signatories together account fora significant share of the votes at the MDBs. Also,
high-income countries should extend their commitment to end their domestic support for fossil fuels
as well and advocate for other signatories to do thesame. Last but not least, the commitments made in
the statement should be cemented in existing international policy processes including at the MDBs, in the
G7, G20 and the OECD.

Supportive policies and policy coherence
In addition to strengthening the Glasgow agreement
to end new fossil investments, it is also important to

36 | PHASING OUT FOSSIL INVESTMENTS

develop and ensure supportive related legislation tostop investments in high-risk fossil fuel projects that
not only worsen climate change but also cause environmental disasters, social disruption, human rights
violations and threaten the SDGs.
To ensure that companies, including financiers,
prevent and address violations and respect the SDGs
and the Paris Agreement to limit global warming to
1.5°C, governments need to develop legislation toregulate corporations and financiers to prevent orbring an end to harm and provide justice and remedy
for all affected people. Strong and mandatory humanrights and environmental due diligence legislation(mHREDD) can be a step in preventing companies’
involvement in harmful projects like LNG projects
in Mozambique and must enable those affectedby such projects, to hold companies accountable
for their impacts in court in the home countries of
those companies.163 Current voluntary due diligenceprocesses of companies and financiers have proven to
be inadequate. For example, the banks involved in the
Tuna bonds scandal did not act in line with their own
due diligence processes164 just like the energy companies engaged in LNG projects in Mozambique haveshown flawed due diligence regarding environmental,
climate, social and economic impacts and risks.
There are several examples of national mandatory
due diligence legislation focusing on specific sectors,
for example the US act to disclose the use of conflictminerals165, or on specific human rights violations,such as the Dutch child labour due diligence law166
or the UK modern slavery act.167 Yet, currently, theonly national legislation that adopts a cross-sectoral
approach is the French law on the duty of vigilance(2017)168. This law requires all large French companies(with over 5,000 employees in France and over 10,000
in the world) to undertake due diligence regarding thecompanies they control, and all their contractors andsuppliers. Companies that do not fulfil their obligation to publish a vigilance plan are liable to sanctions
and payment of damages. However, it requires timeand further elaboration to clarify what the companies
covered by the law must comply with. So far, while
the publication of vigilance plans has shed some lighton the human rights and environmental policies ofsome major companies, several companies have not
yet published a vigilance plan altogether. Overall, thegeneral view is that the plans published so far lackessential information and fail to meet the requirements of the law. It is now up to the judges to rule on
the exact contents of the vigilance plans, as 7 lawsuits
have been filed by NGOs, unions and victims under
the duty of vigilance law. Other EU countries, suchas the Netherlands169, are also working on developing
cross-sectoral mandatory due diligence legislation.
In February 2022, the European Commission adopted
a proposal for an EU Directive on corporate sustainability due diligence170. This proposal applies tocompany's own operations, their subsidiaries and theirvalue chains and includes the possibility to impose
fines to companies that do not comply. In addition,
victims of harmful projects will have the opportunity

The ECAs that back the
projects in Mozambique
should not only
withdraw their support
immediately, but also
accept accountability
for the damages done.

FUELLING THE CRISIS IN MOZAMBIQUE | 37

to take legal action for damages that could have been
avoided with appropriate due diligence measures.
Despite its intention to ensure justice, the current
text still leaves loopholes that will allow corporations
to escape liability. For example, corporations canverify through ‘contractual assurances’ from their
suppliers that they comply with the companies’ codeof conduct. This way companies can escape providing
remedy when they cause or fail to prevent harm. The
proposal also fails to ease the massive burden of proof
for people seeking justice for corporate abuses in EU
courts. Lastly, the draft law fails to take the opportunity to hold companies liable for making inadequate
greenhouse gas emission reduction plan or meeting
the Paris targets.171 The next step is that the proposal
will be presented to the European Parliament and theCouncil for negotiation and approval. Once adopted,
Member States will have two years to transpose the
Directive into national law and communicate the relevant texts to the Commission. It is important that thecurrent loopholes are addressed in the final text andnational laws.
Internationally, the Human Rights Council has beenworking for a number of years on a UN Legally Binding
Instrument (LBI) on Business and Human Rights toregulate the activities of transnational corporations
to prevent and remediate human rights abuses. The
third revised draft was published in August 2021172
and negotiated by 70 states at the 7th session of
the open-ended intergovernmental working group on
Transnational Corporations and Other Business Enterprises With Respect to Human Rights in October 2021.
Even though promising progress has been made overthe past 6 years, a final binding instrument still seems
far away as countries are very divided and several
countries, including the US, the UK and Japan, evenvoiced the need for an alternative approach instead of
a Legally Binding Instrument, which would be a huge
step backwards in the process. Continued pressure isneeded to move ahead with the LBI.

Conclusion
At international, regional and national level progressive
and climate-aware governments and policy makers are
increasingly working on developing the policies andlegislation that are needed to achieve the Paris objectives and to prevent adverse environmental, humanrights, social and economic impacts of corporate
activities and projects. The momentum for change
is building, after many years of silence, denial andunderestimation of the impacts global warming andthe role of fossil fuels.
Nevertheless, there are still shortcomings in current
policy developments that need to be addressed inorder to make the rapid progress needed. Firstly, it isnecessary to leave no room for different interpretations of definitions and exemptions that would allow
investments in and support for the fossil industry
to continue. In addition, it is important that thephase-out of fossil finance and the scaling-up of
renewable energy investments starts immediately. We

simply cannot afford to start any new fossil fuel projects that will continue for years to come. At the sametime, policies aimed at tackling the climate crisis mustbe supported by policies aimed at regulating corporations to prevent environmental damage, human rights
violations, corruption and other harmful side effects ofprofit-driven fossil projects.
Taking responsibility and accountability for thedamage in Mozambique requires the companies
involved to dismantle the current constructions andinfrastructure and ensure compensation and reparations for impacted communities and ecosystems.
The ECAs that back the projects in Mozambique
should not only withdraw their support immediately,
but also accept accountability for the damages done.
All parties involved carry responsibility should work
together to ensure sustainable development for
Mozambique, including through supporting a just transition to renewable energy.

V
RECOMMENDATIONS

recommendations

FUELLING THE CRISIS IN MOZAMBIQUE | 39

The humanitarian disaster currently taking place innorthern Mozambique is linked to the gas discoveries
and the operations of fossil transnational corporations
and their financiers. ECA support for the projects
that are run by these corporations has been essential: Given the large and well-known risks that the gas
projects in the area entail, it is highly unlikely thatcompanies would have taken these risks without thebacking of public finance support.
The grounds on which the ECAs in countries like theNetherlands, France, Italy, the United Kingdom andthe United States, have approved their support areincompatible with these countries' commitment to
the Paris agreement and national and international
agreements on responsible governance. The situationin Mozambique has escalated to the point where theMozambique LNG project is at a standstill, while nosolution to the ongoing conflict and human suffering
is in sight. The governments, ECAs and companies
involved must take responsibility for their role in thecrisis. Below, we list urgent recommendations related
to address the current situation in Mozambique aswell as recommendations to prevent these kinds ofmalpractices in the future and effectively counteract
further climate change.

1. Recommendations related to the LNG
projects in Cabo Delgado, Mozambique
The LNG projects in Cabo Delgado, Mozambique, areincompatible with the 1.5˚C global warming limit as
set out in the Paris agreement and the projects havecontributed to social tensions escalating into violent
conflict and humanitarian disaster. It is therefore
necessary to end the industry’s operations immediately, safely dismantle current infrastructure andensure compensation and reparations to impacted
communities and the environment, as well as support
Mozambique´s sustainable future by supporting thefull development of its renewable energy potential. All
parties involved should take their responsibility in thisprocess:• ECAs from the Netherlands, France, United
Kingdom, Italy, the United States, Korea, Japan,
China and South Africa, and other investors, should
withdraw their financial support to the LNG projects in Mozambique based on the grounds that thedecision-making process was flawed and basedon the wrong assumptions. In addition, the ECAs
and other investors should critically review theirdecision-making and due diligence processes that
led to the approval of support for the LNG projects
in Mozambique and be transparent about this.
• TotalEnergies should ensure an immediate, justphase-out of the Mozambique LNG project.
• Eni, ExxonMobil and CNPC should cancel the
Rovuma LNG project, not moving forward with the
Final Investment Decision.

• Eni and ExxonMobil should dismantle the Coral
South FLNG plant, ensuring reparations of current
environmental impacts, based on the facts that it
is incompatible with climate commitments, causes
irreversible environmental damage and will notdeliver economic development or prosperity for
Mozambique.
• TotalEnergies should ensure the full implementationof their resettlement commitments as laid out inthe resettlement plan immediately and generouslycompensate displaced people and repair broken
commitments.
• TotalEnergies, Eni, ExxonMobil as well as othercompanies and players, financiers and governmental actors must make reparations, including
ensuring financial compensation, for environmental
destruction and the impacts they have had oncommunities, including displacement and lossof livelihoods, based on the demands of affected
people.
• All companies, financiers and government actors
should work together to initiate sustainable development and just transition interventions andaddress the (effects of) violence, trauma, foodinsecurity, displacement, by ensuring:• The development and implementation of sustainable energy policies, prioritizing energy needs ofMozambican citizens and renewable energy andenergy efficiency;• The withdrawal of military troops and private
security companies and addressing the serious
human and women’s rights violations andsuppression by military forces, holding responsible parties accountable.

2. Policy recommendations to prevent andend harmful fossil fuel projects worldwide
On order to end (investments in) new, harmful fossil
fuel projects, it is important that governments show
ambition and urgency in the implementation of the
Glasgow commitment to end direct and indirect public
fossil finance and develop and implement binding
national, regional and international legislation to regulate corporations.
a. Recommendations on implementing the Glasgow
Statement on international public finance:• Define the term ‘unabated’ to mean an end to all
upstream and midstream fossil finance to avoid
any misuse or continued support for fossil fuels.
• Define ‘limited and clearly defined exceptions’to ensure that these do not allow for support
for gas infrastructure, anywhere in the world,
and include only very limited downstream fossil
finance in cases where other options are unavailable (eg emergency settings).

40 | RECOMMENDATIONS• Avoid an increase in direct support for fossil
fuel projects before the 2022 deadline: Review
funding for all proposed fossil fuel projects
to ensure they meet the Glasgow statement
requirements before the end-2022 deadline tolimit gas lock in.
• Ensure the commitment extends to related fossil
fuel infrastructure, including transportation,
ports, airports, etc.
• Extend the Glasgow commitment to domestic
support for fossil fuels and advocate for othersignatories to do the same.

b. Further recommendations for Export Credit Agencies and the governments behind them:• Ensure that ECAs act in line with the OECD
Arrangement and the Common Approaches (e.g.
assess country risks according to the likelihoodof whether they will service their external debts
and corruption; prevent and mitigate adverse
environmental and social impacts of projects;
undertake appropriate environmental and social
reviews and assessments; protect and respecthuman rights, ensuring a gender perspective,
particularly in situations where the potential
impacts from projects or existing operations
pose risks to human rights, such as projects inresource-rich and conflict-prone areas and countries; and foster transparency, predictability andresponsibility in decision-making) and ensurethat the OECD Arrangement and Common
Approaches are soon reviewed to align them to
the Paris Agreement and Glasgow Statement.
• Ensure that ECAs rigorously improve and betransparent about their Due Diligence practices
including ensuring clear contractual clauses onwhen to pull out of a project.

c. Recommendations for corporate accountability
legislation:• Develop and implement strong and effective binding rules for corporations at national,
regional and international level, including
constructively engaging in the process towards a
UN legally binding instrument to regulate transnational corporations in human rights law.
• Ensure that any legislation to regulate corporations includes the legal responsibility of parent
and outsourcing companies over their wholevalue chains and business relationships, as wellas provide justice and remedy for all affected
people, as soon as possible and at all levels(national, regional and international). New laws
must clarify that the company’s primary obligation is to prevent or bring an end to harm, andcompanies must not be able to escape liability

for harm by arguing that they have respected
due diligence obligations.
• Ensure that any new legislation includes administrative, civil and criminal liability when companies
do not comply with their obligation to prevent
human rights violations and environmental harm,
and when they cause or contribute to violations
and harm, and the removal of the obstacles that
affected people face when seeking justice.
• Ensure that new corporate legislations include
concrete obligations for all companies to identify
the climate risks in their value chains, make aplan to bring them in line with the Paris Agreement, including short, medium and long termemission reduction targets and take measures toreduce their total emissions (scope 1, 2 and 3) intheir global value chains.
• Ensure that any new legislation includes strong
and effective enforcement mechanisms andadequate sanctions for non-compliance.

FUELLING THE CRISIS IN MOZAMBIQUE | 41

V
TIMELINE

42 | RECOMMENDATIONSSources
FUELLING THE CRISIS IN MOZAMBIQUE | 43

Sources1
Global Initiative: Insurgency, illicit markets and corruption: The Cabo Delgado conflict and its regional implications (Julia Stanyard,
Alastair Nelson, Greg Ardé, Julian Rademeyer; February 2022)
2
Financial Times: IMF halts Mozambique aid after finding undisclosed debts of $1bn https://www.ft.com/content/6c755214-057f11e6-9b51-0fb5e65703ce
3

TotalEnergies Resettlement plans and programs https://mzlng.totalenergies.co.mz/en/sustainability/resettlement

International Crisis Group: Stemming the insurrection in Mozambique’s Cabo Delgado https://www.crisisgroup.org/africa/southern-africa/mozambique/303-stemming-insurrection-mozambiques-cabo-delgado
4Amnesty International. What I saw is death; war crimes in Mozambique’s forgotten cape (2021)
https://www.amnesty.org/en/documents/afr41/3545/2021/en/

5

6
The Defense Post: EU Agrees Military Training Mission for Mozambique
https://www.thedefensepost.com/2021/06/30/eu-mozambique-military-training/

US Embassy: US Government trains Mozambican military forces on lifesaving tactics https://mz.usembassy.gov/u-s-government-trains-mozambican-military-forces-on-lifesaving-tactics/

7

8

SADC: SADC mission Mozambique

https://www.sadc.int/news-events/news/sadc-mission-mozambique-samim-brief/
9
Amnesty International: Mozambique: Detained journalist in critical condition denied medical treatment (5 March 2019)https://www.amnesty.org/en/latest/news/2019/03/mozambique-detained-journalist-in-critical-condition-denied-medical-treatment/
10
Reporters Without Borders: Joint letter to Mozambique’s president about journalist’s disappearance (28 April 2020)
https://rsf.org/en/news/joint-letter-mozambiques-president-about-journalists-disappearance
11
UNFCCC Paris Agreement 2015
https://unfccc.int/sites/default/files/english_paris_agreement.pdf

International Energy Agency: Net Zero by 2050: A Roadmap for the Global Energy Sector. https://www.iea.org/reports/net-zero-by-2050

12

Oil Change International: Burning the gas ‘bridge fuel’ myth; why gas is not clean, cheap, or necessary https://priceofoil.
org/2019/05/30/gas-is-not-a-bridge-fuel/13

14
Banktrack: The impacts of the LNG industry in Cabo Delgado, Mozambique https://www.banktrack.org/download/the_impacts_of_the_lng_industry_in_cabo_delgado_mozambique/impacts_of_lng_in_mozambique_by_ja.pdf

Friends of the Earth EWNI: Briefing: UK Export Finance – climate litigation (June 2021) https://cdn.friendsoftheearth.
uk/sites/default/files/downloads/UKEF_Briefing_updated_June_2021.pdf?_ga=2.233345821.2057823660.16471693311253559740.1647169330

15

Reliefweb: Climate Change Profile Mozambique (2018)https://reliefweb.int/report/mozambique/climate-change-profile-mozambique

16

17

Open Oil: Too Late to Count: a financial analysis of Mozambique’s gas sector (Johnny West and Daniela Q. Lépiz, 2021)

Centro de Integridade Publica: Certificação de custos: Governo corre o risco de perder receitas por não fiscalizar 7,2 mil milhões
de dólares em custos referentes aos projectos da Bacia do Rovuma (February 2020)
https://www.cipmoz.org/pt/2020/02/02/certificacao-de-custos-governo-corre-o-risco-de-perder-receitas-por-fiscalizar-72-milmilhoes-de-dolares-em-custos-referentes-aos-projectos-da-bacia-do-rovuma/
18

19Open Oil: Too Late to Count: a financial analysis of Mozambique’s gas sector (Johnny West and Daniela Q. Lépiz, 2021)

E3G: The failure of ‘gas for development’ Mozambique case study (Jonathan Gaventa; December 2021) https://www.e3g.org/
publications/the-failure-of-gas-for-development-mozambique-case-study/
20

Banktrack, Milieudefensie, Oil Change International: Locked out of a just transition; fossil fuel financing in Africa (Isabelle
Geuskens and Henrieke Butijn; March 2022) https://priceofoil.org/content/uploads/2022/03/Fossil-Fuel-Financing-in-Africa-March-2022.pdf

21

TotalEnergies: Total closes the acquisition of Anadarko’s shareholding in Mozambique LNG https://totalenergies.com/media/
news/press-releases/total-closes-acquisition-anadarkos-shareholding-mozambique-lng

22

Dutch Ministry of Foreign Affairs: Final Energy Report Mozambique (Kees Mokveld and Steven von Eije; 2018)https://www.rvo.nl/sites/default/files/2019/01/Final-Energy-report-Mozambique.pdf

23

E3G: The failure of ‘gas for development’ Mozambique case study (Jonathan Gaventa; December 2021) https://www.e3g.org/
publications/the-failure-of-gas-for-development-mozambique-case-study/

24

Dutch NGOs: Both ENDS, Milieudefensie (FoE Netherlands), FoE Europe and SOMO; French NGO: Les Amis de la Terre France(FoE France); Italian NGO: ReCommon; UK NGO: FoE EWNI (Friends of the Earth England, Wales and Northern Ireland); US NGO:
Friends of the Earth US; Global Strategic Communication Council (GSCC network)

25

Consultec – Consultores Associados, Lda., Environmental Impact Assessment Process for the Floating Liquefied Natural Gas
Project: Environmental Impact Study Final Report (March 2015)
https://www.banktrack.org/download/environmental_impact_assessment_process_for_the_floating_liquefied_natural_gas_
project/eis_volume_ii_en_final_report.pdf

26

Glasgow Statement on the international public support for the clean energy transition. https://ukcop26.org/statement-on-international-public-support-for-the-clean-energy-transition/

27

28
World Population Review: Poorest countries in the world
https://worldpopulationreview.com/country-rankings/poorest-countries-in-the-world

44 | SOURCES
Reuters: Oil major Total closes purchase of Anadarko's Mozambique LNG asset (30 September 2019)https://www.reuters.com/article/us-total-mozambique-idUSKBN1WF0HM

29

30
S&P Global Commodity Insight: Anadarko reaches FID on 12.88 mil mt/year Area 1 Mozambique LNG project (19 June 2019)https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/natural-gas/061919-anadarko-reaches-fid-on-1288mil-mt-year-area-1-mozambique-lng-project

The Final Investment Decision is the moment when the Board of Directors of the company decides to move forward with the
project and agrees to major financial commitments.

31

32

Ibid

33

Ibid

Offshore Energy: Eni’s Coral Sul FLNG arrives in Mozambique (4 January 2022) https://www.offshore-energy.biz/enis-coral-sulflng-arrives-in-mozambique/34

35
Bloomberg: Eni finalizes $7 billion Mozambique gas project investment (1 June 2017) https://www.bloomberg.com/news/articles/2017-06-01/eni-finalizes-7-billion-investment-in-mozambique-gas-project

TotalEnergies: Total announces the signing Mozambique LNG project financing (17 July 2020) https://totalenergies.com/media/
news/news/total-announces-signing-mozambique-lng-project-financing

36

37
Reuters: Italy’s Eni signs LNG deal in Mozambique, raising hopes of gas boom (1 June 2017) https://www.reuters.com/article/
us-eni-mozambique-idUSKBN18S6AW
38
Dutch NGOs: Both ENDS, Milieudefensie (FoE Netherlands), FoE Europe and SOMO; French NGO: Les Amis de la Terre France(FoE France); Italian NGO: ReCommon; UK NGO: FoE EWNI (Friends of the Earth England, Wales and Northern Ireland); US NGO:
Friends of the Earth US; Global Strategic Communication Council (GSCC network)

The Guardian: UK could face lawsuit over $1bn aid to Mozambique gas project (20 July 2020) https://www.theguardian.com/business/2020/jul/20/uk-could-face-lawsuit-over-1bn-aid-to-mozambique-gas-project

39

40
Royal Van Oord is a Dutch maritime contracting company that specializes in dredging, land reclamation and constructing man
made islands.
41
Saipem is an advanced technological and engineering platform for the design, construction and operation of complex, safe andsustainable infrastructures and plants.
42
The loan for the onshore Afungi LNG park was approved in September 2019 and amended in May 2020 to include offshore
activities as well and the amount reduced from $5 billion to $4.7 billion. https://www.exim.gov/news/exim-board-unanimously-approves-amended-financing-exports-mozambique-lng-project-and-support

Force majeure is a clause that is included in contracts to remove liability for natural and unavoidable catastrophes. It also
encompasses human actions, such as armed conflict. In the case of Mozambique, TotalEnergies declaring Force Majeure meansthat the company halted the Mozambique LNG project and withdrew the majority of staff until the security situation improves.

43

Friends of the Earth: Court Appeal to hear Mozambique gas plant legal challenge (16 March 2022) https://friendsoftheearth.uk/
climate/court-appeal-hear-mozambique-gas-plant-legal-challenge

44

Rainforest Action Network: Case study Mozambique LNG projects (23 March 2021)
https://www.ran.org/the-understory/case-study-mozambique-lng-projects/

45

Banktrack, Milieudefensie, Oil Change International: Locked out of a just transition; fossil fuel financing in Africa (Isabelle
Geuskens and Henrieke Butijn; March 2022) https://priceofoil.org/content/uploads/2022/03/Fossil-Fuel-Financing-in-Africa-March-2022.pdf

46

Upstream Energy Explored: ‘We will not build a plant surrounded by soldiers’: Pouyanne's demands for reviving Mozambique LNG
project (10 February 2022)
https://www.upstreamonline.com/lng/we-will-not-build-a-plant-surrounded-by-soldiers-pouyannes-demands-for-reviving-mozambique-lng-project/2-1-1166725

47

48

Reuters: Exclusive: Exxon and Total in talks over Mozambique LNG resource-sharing deal – sources (26 November 2020)

https://www.reuters.com/article/exxonmobil-mozambique-lng-idINKBN28606E
49

Eni: Coral South: The gas field off the coast of Mozambique

https://www.eni.com/en-IT/operations/mozambique-coral-south.html
National Geographic: Natural gas is a much ‘dirtier’ energy source than we thought (19 February 2020) https://www.nationalgeographic.com/science/article/super-potent-methane-in-atmosphere-oil-gas-drilling-ice-cores

50International Energy Agency: Net Zero by 2050: A Roadmap for the Global Energy Sector. https://www.iea.org/reports/net-zero-by-2050

51

52
Oil Change International: Burning the gas ‘bridge fuel’ myth; why gas is not clean, cheap, or necessary https://priceofoil.
org/2019/05/30/gas-is-not-a-bridge-fuel/53
UNFCCC: The evidence is clear: The time for action is now. We can halve emissions by 2030 (4 April 2022) https://unfccc.int/
news/the-evidence-is-clear-the-time-for-action-is-now-we-can-halve-emissions-by-2030

Banktrack: The impacts of the LNG industry in Cabo Delgado, Mozambique https://www.banktrack.org/download/the_impacts_of_the_lng_industry_in_cabo_delgado_mozambique/impacts_of_lng_in_mozambique_by_ja.pdf

54

55
Friends of the Earth: Briefing: UK Export Finance – climate litigation (June 2021) https://cdn.friendsoftheearth.uk/sites/default/
files/downloads/UKEF_Briefing_updated_June_2021.pdf?_ga=2.233345821.2057823660.1647169331-1253559740.1647169330
56
Les Amis de la Terre: De l’eldarado gazier au chaos: quand la France pousse le Mozambique dans le piège du gaz (June 2020)
https://www.amisdelaterre.org/wp-content/uploads/2020/06/de-leldorado-gazier-au-chaos-les-amis-de-la-terre-france.pdf
57
Reliefweb: Mozambique, Africa | 2021-22 Floods and Cyclones - Revised Emergency Appeal n° MDRMZ016 (31 January 2022)
https://reliefweb.int/report/mozambique/mozambique-africa-2021-22-floods-and-cyclones-revised-emergency-appeal-n-FUELLING THE CRISIS IN MOZAMBIQUE | 45
mdrmz016
Reliefweb: Climate Change Profile Mozambique (2018)https://reliefweb.int/report/mozambique/climate-change-profile-mozambique

58

59

A vessel strike is a collision between any type of boat and a marine animal in the ocean.

The Revelator: Blinded by the light pollution (Dipika Kadaba; 2018)https://therevelator.org/blinded-light-pollution/
60

ERM, Mozambique LNG Environmental Impact Assessment, Chapter 11: Offshore and Near Shore
Environmental Impact Assessment and Mitigation
http://www.mzlng.com/content/documents/MZLNG/EIA/Volume_II/English/Chapter_11-_LNG_Final_EIA_Sept_2014_Eng.pdf.

61

Consultec – Consultores Associados, Lda., Environmental Impact Assessment Process for the Floating Liquefied Natural Gas
Project: Environmental Impact Study Final Report (2015)
https://www.banktrack.org/download/environmental_impact_assessment_process_for_the_floating_liquefied_natural_gas_
project/eis_volume_ii_en_final_report.pdf

62African Development Bank Group: Mozambique LNG Environmental and Social Impact Assessment (ESIA) Summary (April 2019)https://www.afdb.org/fileadmin/uploads/afdb/Documents/Environmental-and-Social-Assessments/Mozambique_LNG_ESIA_
Summary.pdf

63

Wikipedia: List of pipeline accidents
https://en.wikipedia.org/wiki/List_of_pipeline_accidents

64

65
TotalEnergies: Resettlement plans and programs
https://mzlng.totalenergies.co.mz/en/sustainability/resettlement

TotalEnergies: Réponses aux questions écrites (AGM June 2021) https://totalenergies.com/sites/g/files/nytnzq121/files/documents/2021-06/AG2021_reponses-aux-questions-ecrites.pdf

66

Banktrack, Milieudefensie, Oil Change International: Locked out of a just transition; fossil fuel financing in Africa (Isabelle
Geuskens and Henrieke Butijn; March 2022) https://priceofoil.org/content/uploads/2022/03/Fossil-Fuel-Financing-in-Africa-March-2022.pdf

67

68
International Crisis Group: Stemming the insurrection in Mozambique’s Cabo Delgado https://www.crisisgroup.org/africa/southern-africa/mozambique/303-stemming-insurrection-mozambiques-cabo-delgado

Banktrack: The impacts of the LNG industry in Cabo Delgado, Mozambique https://www.banktrack.org/download/the_impacts_of_the_lng_industry_in_cabo_delgado_mozambique/impacts_of_lng_in_mozambique_by_ja.pdf

69

70

Cassava is the principal starch in Mozambique, making up for 30% of the calorie intake of Mozambicans.

iD4D Sustainable Development News: Mozambique: from natural gas fields to Islamist insurgency (Thierry Vircoulon, 18 May
2021)
https://ideas4development.org/en/mozambique-gas-fields-islamist-insurgency/

71

Global Initiative: Insurgency, illicit markets and corruption: The Cabo Delgado conflict and its regional implications (Julia Stanyard, Alastair Nelson, Greg Ardé, Julian Rademeyer; February 2022)
https://globalinitiative.net/wp-content/uploads/2022/02/GITOC-ESAObs-Insurgency-illicit-markets-and-corruption-The-Cabo-Delgado-conflict-and-its-regional-implications.pdf

7273

Madrasas are religious schools for the study of Islam74

The group in Mozambique is unrelated to the Al-Shabaab jihadist group in Somalia.

International Crisis Group: Stemming the insurrection in Mozambique’s Cabo Delgado https://www.crisisgroup.org/africa/southern-africa/mozambique/303-stemming-insurrection-mozambiques-cabo-delgado
75

76

Ibid

Reuters: Twelve people, possibly foreigners, beheaded in Mozambique attack – police (8 April 2021)
https://www.reuters.com/article/uk-mozambique-insurgency-idUSKBN2BV1S1
77

Combating Terrorism Center: The March 2021 Palma attack and the evolving Jihadi terror threat to Mozambique (April/May
2021)
https://ctc.westpoint.edu/the-march-2021-palma-attack-and-the-evolving-jihadi-terror-threat-to-mozambique/

78

Mail & Guardian: Frelimo gambled everything on gas and lost (Joseph Hanlon; 8 April 2021)
https://mg.co.za/africa/2021-04-08-frelimo-gambled-everything-on-gas-and-lost/

79

Mail & Guardian: No emergency plan for the ‘Battle of Palma’ (Erika Gibson; 31 March 2021)
https://mg.co.za/africa/2021-03-31-no-emergency-plan-for-the-battle-of-palma/

80

81
Reuters: Total declares force majeure on Mozambique LNG after insurgent attacks (26 April 2021) https://www.reuters.com/
world/africa/frances-total-declares-force-majeure-mozambique-lng-project-2021-04-26/
82
Upstream Energy Explored: ‘We will not build a plant surrounded by soldiers’: Pouyanne's demands for reviving Mozambique LNG
project (10 February 2022)
https://www.upstreamonline.com/lng/we-will-not-build-a-plant-surrounded-by-soldiers-pouyannes-demands-for-reviving-mozambique-lng-project/2-1-1166725
83
Amnesty International. What I saw is death; war crimes in Mozambique’s forgotten cape (2021)
https://www.amnesty.org/en/documents/afr41/3545/2021/en/
84

Ibid.

Daily Maverick: Wagner private military force licks wounds in northern Mozambique (29 November 2019) https://www.dailymaverick.co.za/article/2019-11-29-wagner-private-military-force-licks-wounds-in-northern-mozambique/85

86
Amnesty International. What I saw is death; war crimes in Mozambique’s forgotten cape (2021)
https://www.amnesty.org/en/documents/afr41/3545/2021/en/

46 | SOURCES
The Investigative Journalism Center Mozambique: Humanizing security in Cabo Delgado: A CSO report on the drivers of conflictand its impact on civilians (Luis Nhachote; August 2021)
https://gga.org/humanizing-security-in-cabo-delgabo/

87

88

Ibid.

Mozambique Mining Cadastre Map Portal
https://portals.landfolio.com/mozambique/en/
89

90
The Defense Post: EU Agrees Military Training Mission for Mozambique
https://www.thedefensepost.com/2021/06/30/eu-mozambique-military-training/

US Embassy: US Government trains Mozambican military forces on lifesaving tactics https://mz.usembassy.gov/u-s-government-trains-mozambican-military-forces-on-lifesaving-tactics/

91

The Investigative Journalism Center Mozambique: Humanizing security in Cabo Delgado: A CSO report on the drivers of conflictand its impact on civilians (Luis Nhachote; August 2021)
https://gga.org/humanizing-security-in-cabo-delgabo/

92

Cabo Ligado Weekly 9-15 August 2021
https://www.caboligado.com/reports/cabo-ligado-weekly-9-15-august-2021

93

SADC: SADC mission in Mozambique (SAMIM) in brief (10 November 2021)
https://www.sadc.int/news-events/news/sadc-mission-mozambique-samim-brief/

94

95
Reuters: Rwanda deploys troops to Mozambique to help fight insurgency (9 July 2021) https://www.reuters.com/world/africa/
rwanda-says-will-start-deploying-troops-mozambique-2021-07-09/

International Crisis Group: Winning peace in Mozambique’s embattled North (10 February 2022) (https://www.crisisgroup.org/
africa/southern-africa/mozambique/b178-winning-peace-mozambiques-embattled-north96

The Investigative Journalism Center Mozambique: Humanizing security in Cabo Delgado: A CSO report on the drivers of conflictand its impact on civilians (Luis Nhachote; August 2021)
https://gga.org/humanizing-security-in-cabo-delgabo/

97

98
UN News: Cabo Delgado displacement could reach 1 million, UN officials warn (22 March 2022) https://news.un.org/en/
story/2021/03/1087952

Reliefweb: 2021 Mozambique Humanitarian Response Plan (Abridged Version) (18 December 2020)
https://reliefweb.int/report/mozambique/2021-mozambique-humanitarian-response-plan-abridged-version

99

Reliefweb: UNHCR appeals for Mozambicans fleeing violence to be given access to asylum in Tanzania (18 May 2021)
https://reliefweb.int/report/mozambique/unhcr-appeals-mozambicans-fleeing-violence-be-given-access-asylum-tanzania

100

101
FairPlanet: Mozambican insurgency brews problems for refugees in the region (13 September 2021) https://www.fairplanet.org/
story/mozambican-insurgency-brews-problems-for-refugees-in-the-region/
102
The Investigative Journalism Center Mozambique: Humanizing security in Cabo Delgado: A CSO report on the drivers of conflictand its impact on civilians (Luis Nhachote; August 2021)
https://gga.org/humanizing-security-in-cabo-delgabo/

Reporters Without Borders: Mozambique news blackout in the Northhttps://rsf.org/en/mozambique

103

104
Amnesty International: Mozambique: Detained journalist in critical condition denied medical treatment (5 March 2019)https://www.amnesty.org/en/latest/news/2019/03/mozambique-detained-journalist-in-critical-condition-denied-medical-treatment/

Reporters Without Borders: Joint letter to Mozambique’s president about journalist’s disappearance (28 April 2020) https://rsf.
org/en/news/joint-letter-mozambiques-president-about-journalists-disappearance

105

106
Civicus: Mozambique's Adoption of Universal Periodic Review on Human Rights (1 October 2021)
https://www.civicus.org/index.php/media-resources/news/united-nations/geneva/5322-mozambique-s-adoption-of-universal-periodic-review-on-human-rights

Club of Mozambique: Cabo Delgado: ‘Structural and systemic’ poverty behind four years of insurgency – analysts (5 October
2021)
https://clubofmozambique.com/news/cabo-delgado-structural-and-systemic-poverty-behind-four-years-of-insurgency-analysts-202286/

107

108
Amnesty International. What I saw is death; war crimes in Mozambique’s forgotten cape (2021)
https://www.amnesty.org/en/documents/afr41/3545/2021/en/
109
iD4D Sustainable Development News: Mozambique: from natural gas fields to Islamist insurgency (Thierry Vircoulon, 18 May
2021)
https://ideas4development.org/en/mozambique-gas-fields-islamist-insurgency/
110
TotalEnergies: Total Closes the Acquisition of Anadarko’s Shareholding in Mozambique LNG (30 September 2019)https://totalenergies.com/media/news/press-releases/total-closes-acquisition-anadarkos-shareholding-mozambique-lng

IMF: Republic of Mozambique: Selected issues (8 January 2016) https://www.elibrary.imf.org/view/journals/002/2016/010/article-A001-en.xml

111

112

Open Oil: Too Late to Count: a financial analysis of Mozambique’s gas sector (Johnny West and Daniela Q. Lépiz, 2021)

113

Centro de Integridade Publico https://www.cipmoz.org/en/

Centro de Integridade Publico: Certificação de custos: Governo corre o risco de perder receitas por não fiscalizar 7,2 mil milhões
de dólares em custos referentes aos projectos da Bacia do Rovuma (February 2020)
https://www.cipmoz.org/pt/2020/02/02/certificacao-de-custos-governo-corre-o-risco-de-perder-receitas-por-fiscalizar-72-milmilhoes-de-dolares-em-custos-referentes-aos-projectos-da-bacia-do-rovuma/

114

FUELLING THE CRISIS IN MOZAMBIQUE | 47
115
E3G: The failure of ‘gas for development’ Mozambique case study (Jonathan Gaventa; December 2021) https://www.e3g.org/
publications/the-failure-of-gas-for-development-mozambique-case-study/

Financial Times: IMF halts Mozambique aid after finding undisclosed debts of $1bn https://www.ft.com/content/6c755214-057f11e6-9b51-0fb5e65703ce

116

117
Daily Maverick: Ernst & Young and the scam that cost Mozambique $2.2bn (5 July 2021) https://www.dailymaverick.co.za/article/2021-07-05-ernst-young-and-the-scam-that-cost-mozambique-2-2bn/

Bloomberg: Mozambique Tuna Bonds fund anti-pirate fleet in surprise (13 November 2013) https://www.bloomberg.com/news/
articles/2013-11-13/mozambique-tuna-bonds-fund-anti-pirate-fleet-in-surprise118

E3G: The failure of ‘gas for development’ Mozambique case study (Jonathan Gaventa; December 2021) https://www.e3g.org/
publications/the-failure-of-gas-for-development-mozambique-case-study/

119

120
Bloomberg: IMF Expects Mozambique to Default on Foreign Debt Until 2023 (28 February 2018)https://www.bloomberg.com/news/articles/2018-02-28/imf-expects-mozambique-to-default-on-external-debt-until-2023

E3G: The failure of ‘gas for development’ Mozambique case study (Jonathan Gaventa; December 2021) https://www.e3g.org/
publications/the-failure-of-gas-for-development-mozambique-case-study/

121

Banktrack, Milieudefensie, Oil Change International: Locked out of a just transition; fossil fuel financing in Africa (Isabelle
Geuskens and Henrieke Butijn; March 2022) https://priceofoil.org/content/uploads/2022/03/Fossil-Fuel-Financing-in-Africa-March-2022.pdf

122

NEXI - $2 billion: https://www.nexi.go.jp/en/topics/newsrelease/2020063002.html
JBIC- $3 billion: https://www.jbic.go.jp/en/information/press/press-2020/0716-013514.html
China EXIM - $500 million: https://www.debtwire.com/info/mozambique%E2%80%99s-coral-south-operators-sign-usd-8bn-lngproject-financing-all-lenders-revealed; https://china.aiddata.org/projects/57395/
K-SURE: https://www.debtwire.com/info/mozambique%E2%80%99s-coral-south-operators-sign-usd-8bn-lng-project-financingall-lenders-revealed
KEXIM - $500 million: http://www.businesskorea.co.kr/news/articleView.html?idxno=56631
ECIC - $800 million: https://www.globaltradealert.org/state-act/46452/south-africa-ecic-provides-financing-for-the-mozambiquelng-project

123

124
The Guardian: World has no capacity to absorb new fossil fuel plants, warns IEA (13 November 2018) https://www.theguardian.
com/business/2018/nov/13/world-has-no-capacity-to-absorb-new-fossil-fuel-plants-warns-iea
125
UNFCCC Paris Agreement 2015
https://unfccc.int/sites/default/files/english_paris_agreement.pdf

Legal opinion: International obligations governing the activities of Export Credit Agencies in connection with the continued
financing of fossil fuel related projects and activities (Kate Cook and Jorge E. Viñuales; 24 March 2021)
http://priceofoil.org/content/uploads/2021/05/Legal-opinion-K.-Cook-_-J.-Vinuales-FINAL.pdf

126

127
Oil Change International: Past last call: G20 public finance institutions are still bankrolling fossil fuels (28 October 2021) https://priceofoil.org/2021/10/28/past-last-call-g20-public-finance-institutions-are-still-bankrolling-fossil-fuels/

NGOs in The Netherlands received the presentation, dated March 2020, that Wood Mackenzie made for potential lenders toMozambique LNG after filing a FoI request.

128

Greenhouse Gas Protocol: Corporate Value Chain (Scope 3) Standard
https://ghgprotocol.org/standards/scope-3-standard

129

Consultec – Consultores Associados, Lda., Environmental Impact Assessment Process for the Floating Liquefied Natural Gas
Project: Environmental Impact Study Final Report (2015)
https://www.banktrack.org/download/environmental_impact_assessment_process_for_the_floating_liquefied_natural_gas_
project/eis_volume_ii_en_final_report.pdf

130

Oil Change International: Burning the gas ‘bridge fuel’ myth; why gas is not clean, cheap, or necessary https://priceofoil.
org/2019/05/30/gas-is-not-a-bridge-fuel/131

Oil Change International: Burning the gas ‘bridge fuel’ myth; why gas is not clean, cheap, or necessary https://priceofoil.
org/2019/05/30/gas-is-not-a-bridge-fuel/

132

133
Global Green Growth Institute: Country Brief: Mozambique: Off-grid solar power in Mozambique: opportunities for universal
energy access and barriers to private sector participation (Pranab Baruah, Brendan Coleman; 2019)https://gggi.org/site/assets/uploads/2019/02/Mozambique-Country-Brief.pdf

The Potential of Renewable Energy in Mozambique: An Overview (Fernando Chichango; April 2021)
https://www.researchgate.net/publication/351075767_The_Potential_of_Renewable_Energy_in_Mozambique_An_Overview

134

135
E3G: The failure of ‘gas for development’ Mozambique case study (Jonathan Gaventa; December 2021) https://www.e3g.org/
publications/the-failure-of-gas-for-development-mozambique-case-study/
136
Dutch Ministry of Foreign Affairs: Final Energy Report Mozambique (Kees Mokveld and Steven von Eije; 2018)https://www.rvo.nl/sites/default/files/2019/01/Final-Energy-report-Mozambique.pdf
137
Bloomberg: US Export-Import Bank warned on Mozambique risks before $4.7 billion loan (6 April 2021) https://www.bloomberg.
com/news/articles/2021-04-06/u-s-ex-im-warned-on-mozambique-risks-before-4-7-billion-loan
138

The 2018 statistics from the International Monetary Fund puts Mozambique at number 6 on the list of poorest countries.

OECD: Country Risk Classifications of the Participants to the Arrangement on Officially Supported Export Credits
https://www.oecd.org/trade/topics/export-credits/documents/cre-crc-historical-internet-english.pdf
139

140
Bloomberg: IMF Expects Mozambique to Default on Foreign Debt Until 2023 (28 February 2018)https://www.bloomberg.com/news/articles/2018-02-28/imf-expects-mozambique-to-default-on-external-debt-until-2023
141

Open Oil: Too Late to Count: a financial analysis of Mozambique’s gas sector (Johnny West and Daniela Q. Lépiz, 2021)

142

All Africa: Mozambique: Inhambane Youths Demand Jobs From Sasol (29 July 2021) https://allafrica.com/stories/202107300394.

48 | SOURCES
html
The Times: PM cleans up UK’s reputation on environment by defunding global oil projects (27 July 2020) https://www.thetimes.
co.uk/article/pm-cleans-up-reputation-by-defunding-foreign-oil-projects-vt68ldlk8

143

Politico: Landmark climate report details an atlas of human suffering (28 February 2022) https://www.politico.eu/article/landmark-climate-report-details-an-atlas-of-human-suffering/

144

145
IPCC 6th Assessment Report: Press Release
https://www.ipcc.ch/report/ar6/wg3/resources/press/press-release

Oil Change International: Past last call: G20 public finance institutions are still bankrolling fossil fuels (28 October 2021) https://priceofoil.org/content/uploads/2021/10/Past-Last-Call-G20-Public-Finance-Report.pdf

146

147
European Investment Bank: EU bank launches ambitious new climate and energy lending policy (14 November 2019)https://www.eib.org/en/press/all/2019-313-eu-bank-launches-ambitious-new-climate-strategy-and-energy-lending-policy
148
UK government press release: PM announces that the UK will end support for fossil fuel sector overseas (12 December 2020)
https://www.gov.uk/government/news/pm-announces-the-uk-will-end-support-for-fossil-fuel-sector-overseas

Globeleq: Mozambique’s Paris-aligned Temane Power Plant reaches Financial Close. (8 December 2021) https://www.globeleq.
com/blog/mozambiques-paris-aligned-temane-power-project-reaches-financial-close/

149

BBC: What is fracking and why is it controversial?
https://www.bbc.com/news/uk-14432401

150

151
ADSB: Geen EKV voor kolen en onconventionele brandstoffen https://atradiusdutchstatebusiness.nl/nl/nieuws/
geen-ekv-voor-kolen-en-onconventionele-brandstoffen.html
152
FoE US: Analysis: U.S. Restrictions on Public Finance for Overseas Energy Projects
https://1bps6437gg8c169i0y1drtgz-wpengine.netdna-ssl.com/wp-content/uploads/2021/12/2021.12.10_Analysis-USG-overseas-fossil-fuel-finance-restrictions.pdf
153‘Upstream’ is about extracting oil and natural gas from the ground; ‘midstream’ is about safely moving them thousands of miles;and ‘downstream’ is converting these resources into the fuels and finished products. https://energyhq.com/2017/04/upstream-midstream-downstream-whats-the-difference/
154
Export Finance for Future: Statement of Principle (14 April 2021) https://www.tresor.economie.gouv.fr/Articles/48e53470-62e74048-a507-5292b4ba69f4/files/36bb69c3-e7d9-4b77-b34f-f6240ffa1290

Public statement by civil society organisations on the launch of the Export Finance for Future
Export finance leadership coalition fails to lead
https://www.bothends.org/uploaded_files/inlineitem/210414_Statement_on_Export_Finance_for_Future_FINAL.pdf

155

156
UK COP26: Statement on international public support for the clean energy transition (4 November 2021) https://ukcop26.org/
statement-on-international-public-support-for-the-clean-energy-transition/

Brief regering: Stand van zaken uitwerking COP26 verklaring (7 April 2022) https://www.tweedekamer.nl/kamerstukken/brieven_regering/detail?id=2022Z06867&did=2022D13901

157

Government of the Netherlands: Netherlands continuing to push for greener export finance (24 November 2021)
https://www.government.nl/latest/news/2021/11/24/netherlands-continuing-to-push-for-greener-export-finance

158

159
Oil Change International: CSOs say E3F countries need to act with urgency and integrity to meet commitments to end export
finance for fossil fuels (24 November 2021)
https://priceofoil.org/2021/11/24/csos-say-e3f-countries-need-to-act-with-urgency-and-integrity-to-meet-commitments-to-endexport-finance-for-fossil-fuels/
160
FoE US: Analysis: U.S. Restrictions on Public Finance for Overseas Energy Projects
https://1bps6437gg8c169i0y1drtgz-wpengine.netdna-ssl.com/wp-content/uploads/2021/12/2021.12.10_Analysis-USG-overseas-fossil-fuel-finance-restrictions.pdf

Council of the European Union: Council Conclusions on export credits – approval (1 March 2022) https://data.consilium.europa.
eu/doc/document/ST-6500-2022-ADD-1/en/pdf

161

Global Witness: Hundreds of fossil fuel lobbyists flooding COP26 climate talks (8 November 2021) https://www.globalwitness.
org/en/press-releases/hundreds-fossil-fuel-lobbyists-flooding-cop26-climate-talks/

162

163
Banktrack, Milieudefensie, Oil Change International: Locked out of a just transition; fossil fuel financing in Africa (Isabelle
Geuskens and Henrieke Butijn; March 2022) https://priceofoil.org/content/uploads/2022/03/Fossil-Fuel-Financing-in-Africa-March-2022.pdf

The Guardian: Mozambique fell prey to the promise of fabulous wealth – now it can’t pay nurses (27 January 2017)https://www.theguardian.com/global-development/2017/jan/27/mozambique-fabulous-wealth-gas-reserves-pay-nurses-debt-crisis

164

165
US Securities and Exchange Commission: Disclosing the use of conflict minerals https://www.sec.gov/opa/Article/2012-2012163htm---related-materials.html

MVO Platform: The Netherlands takes a historic step by adopting child labour due diligence law (14 May 2019)https://www.mvoplatform.nl/en/the-netherlands-takes-a-historic-step-by-adopting-child-labour-due-diligence-law/
166

167
UK government Modern Slavery Act 2015
https://www.legislation.gov.uk/ukpga/2015/30/contents/enacted

French Vigilance Law (28 March 2017)https://www.legifrance.gouv.fr/jorf/id/JORFTEXT000034290626

168

La Strada International: Law on mandatory human rights and environmental due diligence (7 December 2021)
https://www.lastradainternational.org/news/dutch-government-announces-mandatory-human-rights-and-environmental-due-diligence-legislation/
169

170

European Commission: Just and sustainable economy: Commission lays down rules for companies to respect human rights andFUELLING THE CRISIS IN MOZAMBIQUE | 49
environment in global value chains (23 February 2022)
https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1145
171
Friends of the Earth Europe: Due Diligence law leaves affected people in the lurch (23 February 2022) https://friendsoftheearth.
eu/press-release/due-diligence-law-leaves-affected-people-in-the-lurch/
172
Human Rights Council 3rd Revised Draft of the Legally Binding Instrument to regulate, in international human rights law, theactivities of transnational corporations and other business enterprises (17 August 2021) https://www.ohchr.org/sites/default/files/
Documents/HRBodies/HRCouncil/WGTransCorp/Session6/LBI3rdDRAFT.pdf

50 | SOURCES

Friends of the Earth Europe gratefully acknowledges financial
assistance from SAGE.

Friends of the Earth Europe gratefully acknowledges financial assistance from the European Commission (LIFE Programme). The sole
responsibility for the content of this document lies with Friends of the
Earth Europe. It does not necessarily reflect the opinion of the funder
mentioned above. The funder cannot be held responsible for any usethat may be made of the information contained therein.