Banking on Climate Choas 2021

By Rainforest Action Network

This blog was originally published as a case study in “Banking on Climate Chaos: Fossil Fuel Finance Report 2021” — a report by Rainforest Action Network, BankTrack, Indigenous Environmental Network, Oil Change International, Reclaim Finance, and Sierra Club. You can see the full report here.

The LNG industry in Cabo Delgado is currently made up of three major offshore and partly onshore projects to extract and then liquefy gas for export: Rovuma LNG, led by Eni and ExxonMobil; Mozambique LNG, led by Total; and Coral South floating LNG (FLNG), led by Eni. 

The gas isn’t expected to be extracted until 2024, and only 12% of it will be used in Mozambique — and yet communities in the gas region have reportedly been suffering from the impacts of the industry for years. They have been forced to move from their homes to make way for Total’s onshore support facilities and airport, housed in the 27-square-mile (70-square-kilometer) Afungi LNG Park. Total relocated over 550 families from their homes to build this park, moving fisherfolk far from the ocean and compensating farmers with land a tenth of the size of what they’d had, far from their new houses. Formerly self-sustaining villages have been left without livelihoods and are reliant on food parcels. Total’s promises of jobs have proven to be hot air: the only jobs community members have received have been short-term construction, cleaning, and other unskilled jobs. On top of the violence already faced by the region given the ongoing violent conflict in Cabo Delgado province, with Mozambique LNG communities also face brutality from the heavy-handed military, whose priority is protecting the industry.

Project finance for the Rovuma LNG project has not yet been secured and the final investment decision has been postponed. Mozambique LNG and Coral South FLNG did reach financial close with direct support from 14 of the world’s 60 largest banks:

  • China: Bank of China, ICBC
  • France: BNP Paribas, BPCE/Natixis, Crédit Agricole, Société Générale
  • UK: HSBC, Standard Chartered
  • U.S.: JPMorgan Chase
  • Japan: Mizuho, MUFG, SMBC Group, SuMi TRUST
  • Italy: UniCredit

Mozambique remains one of the world’s poorest, least developed, and most heavily indebted countries —  70% of its population has no electricity access, and 40% are illiterate. Development of Mozambique LNG and associated projects has yet to solve any of these challenges, and the gamble that it will is, as one article calls it, “a bet [that] can only pay off on a dangerously overheated planet.”

Bank data sourced from the IJGlobal database.