UK “embarrassed” to fund Mozambique gas project, court says | Mozambique

The UK was “embarrassed” to fund a huge gas project in Mozambique while considering ending foreign support for fossil fuels, a court said.

During a three-day High Court hearing, Friends of the Earth highlighted government documents suggesting there would be “obvious repercussions” if the government did not follow through on 1.15 billion dollars. dollars in support of an offshore pipeline and a liquefied natural gas plant in the province of Cabo Delgado. .

Representing the campaign group in a judicial review of the decision to fund the project, lawyer Jessica Simor QC said the rejection would have resulted in the need to unwind existing contracts and a perceived loss of confidence in “the UK’s ability. United to execute transactions ”.

The money – a combination of loans and guarantees – comes from the government’s export credit agency, UK Export Finance (UKEF). At an advanced stage of negotiations, UKEF “felt that not accepting the loan would be embarrassing for the UK given its role in the African Development Bank,” Simor told the court. The African Development Bank is co-financing the project, led by the oil company Total.

UKEF approved the funding in July 2020, concluding that the project could lead to a net reduction in global emissions and help Mozambique meet its own climate targets.

But Friends of the Earth said the project’s climate assessment was inadequate. It is particularly critical that the assessment only examined the extent to which it was compatible with keeping the global average temperature rise at 2 ° C, not the stricter 1.5 ° C, which is now considered a vital physical threshold by scientists.

He also argues that, under the Paris Agreement, the UK has a responsibility to help developing countries increase their renewable energy capacity.

Mozambique is not only one of the poorest countries in the world, but also one of the most affected by the climate crisis and the most vulnerable to its impacts.

It is also in the midst of a violent insurgency led by the Islamic State. Environment Minister Zac Goldsmith said earlier this year that “the prospect of massive gas revenues coming in” was one of the driving forces behind the conflict and he hoped it would be the last fossil fuel project. funded by UKEF.

Even as talks on Mozambique continued, the government was considering ending all foreign funding related to fossil fuels. Documents cited to the court suggest that the civil service feared that the rejection of Cabo Delgado’s project would “pre-empt” the government’s policy decision and affect broader British support for the oil and gas industry.

The UK finally pledged to end its support for overseas projects last December, five months after the deal with Mozambique was finalized.

Parts of the government seem to have been nervous about funding the project, against which the then foreign and international development secretaries, as well as the COP secretariat, had advised against.

UKEF, which has been accused by activists of “far-reaching hypocrisy” about its track record in funding fossil fuels, has acknowledged that there are both environmental and reputational risks to it. ‘granting of funding.

But internal government documents cited in court also showed their rejection could spur further campaigns against UKEF, including in other sectors such as aviation.

UKEF declined to comment on the ongoing legal proceedings, but said in a statement it remained committed to following “sound and internationally recognized due diligence before providing support to projects abroad.”

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