Britain’s government said on Monday, December 1, it would no longer provide TotalEnergies with a loan for a gas project in Mozambique that the French group halted over a jihadist attack. Its decision to withhold up to $1.15 billion of funding for the liquified natural gas project (LNG) comes after a consortium led by TotalEnergies announced in October that it would lift a suspension on the work imposed in 2021 due to the deadly violence. “Whilst these decisions are never easy, the government believes that UK financing of this project will not advance the interests of our country,” Business Secretary Peter Kyle said in a statement.

UK Export Finance (UKEF), a government agency, has made the decision to halt financing for the project, which was originally seen to benefit Britain. The $20-billion LNG project was paused following a bloody jihadist attack that killed an estimated 800 people. TotalEnergies lifted the force majeure it had declared after the siege and sought $4.5 billion in cost overruns linked to the delay to be covered by the Mozambique government. The company, which owns 26.5% of the project, has said it hopes to resume production at the gas site in 2029, subject to the African country’s approval of its new budget plan.

The UK government, meanwhile, “remains committed to backing British exporters, including through support from UKEF,” Kyle added Monday. “We also remain committed to our national partnership with Mozambique and building long-term respectful relationships with African countries to boost sustainable growth, tackle the climate crisis and address insecurity.”

Mozambican and international NGOs have accused TotalEnergies of holding Mozambique “hostage” over the French group’s demands of “ultra-favorable” conditions to restart its gas project in the country’s restive northeastern Cabo Delgado province.

Several gas projects in the area, also involving Italian group ENI and American oil giant ExxonMobil, could “make Mozambique one of the world’s top 10 (natural gas) producers, contributing 20% of African production by 2040,” according to a 2024 report by the audit firm Deloitte.

Environmental groups have decried the projects as “climate bombs” that would bring little benefit to Mozambicans, more than 80% of whom lived below the poverty line of three dollars per day in 2022, according to the World Bank.