Business secretary, Peter Kyle, confirmed on Monday, December 1, 2025, that the UK Export Finance (UKEF) agency would pull its support for the long-delayed Mozambique liquified natural gas project, led by French energy giant TotalEnergies. The decision comes five years after the scheme became a focal point for environmental protests and accusations that it was fuelling instability in Cabo Delgado province.
The project has been frozen since 2021, when Islamist militants stormed the nearby town of Palma, killing more than 800 people and forcing Total to evacuate staff and halt operations. The company is preparing to restart work in the coming months after enhanced security measures were deployed in the area.
Kyle said UKEF’s withdrawal followed “a comprehensive assessment of the project and the interests of UK taxpayers”, adding: “Whilst these decisions are never easy, the government believes that UK financing of this project will not advance the interests of our country.”
The UK had initially approved the loan in 2020, shortly after MPs on the environmental audit committee urged the previous Conservative government to end financial support for overseas fossil fuel projects, warning such backing undermined the UK’s climate commitments.
UKEF originally argued the scheme could support more than 2,000 UK jobs, benefit small businesses and deliver economic development for Mozambique. A 2019 agreement with Centrica also raised the possibility that gas from the project could supply British households.
But environmental groups and development campaigners have long criticised the project’s climate impact and the forced relocation of communities living near the construction zone. They also argued that Mozambique – one of the countries most vulnerable to climate change – should be supported to expand renewable energy capacity instead.
Antoine Bouhey of Reclaim Finance said the UK’s withdrawal showed the project was “riddled with problems and cannot be supported”, adding that major lenders including Standard Chartered, Crédit Agricole and Société Générale should now follow suit. “It has been blatantly clear for years that this project is a disaster for local communities and for the climate,” he said.
In a reaction to the development, environmental campaigners, say that UK’s Prime Minister, Keir Starmer, “has righted this wrong”.
Friends of the Earth chief executive, Asad Rehman, said the government’s decision was long overdue. “This gas project is a huge carbon timebomb, linked to serious human rights abuses,” he said. “It should never have been given UK taxpayer-funded support in the first place.”
Rehman urged other governments to withdraw backing and called on the UK to shift support toward climate adaptation efforts and clean energy projects in Mozambique, where 60% of the population still lacks access to electricity.
Adam McGibbon, Campaign Strategist at Oil Change International, said: “Keir Starmer and his government made the right decision to refuse to fund the Mozambique LNG project, which is a human rights and environmental disaster. Committing UK taxpayer’s money to enable the project was a reckless move by the last government and would have breached the UK’s policy to not fund fossil fuel projects overseas. Starmer has now righted this wrong.
“It’s time for the other financiers – governments like The Netherlands, the United States, Italy and Japan, and private financiers like Standard Chartered – to pull out too and put an end to this nightmare project forever.”
Daniel Rubiero, from Justicia Ambiental Mozambique, said: “This decision by the UK shows that it is never too late to correct a mistake. Gas exploration in northern Mozambique has been associated with numerous human rights violations. Local communities have suffered the brunt of this, as well as having lost their livelihoods and lands to the project.
“In addition, the project is a carbon bomb and will have an impact on one of the most pristine ecosystems in Africa.
“Hopefully other financiers reflect on the reality of this project and put people’s rights over profits.”
Environment groups, such as the Friends of the Earth, have long campaigned against UK support for the project.
In October last year, the Friends of the Earth lawyers wrote to the Government and the UKEF chief executive saying that recent developments in climate litigation, including the ‘Finch ruling’, meant that the earlier climate assessment for the project could no longer be used lawfully.
The Supreme Court’s landmark “Finch ruling” requires regulators to include Scope 3 emissions in Environmental Impact Assessments for all new oil projects.
The UK Government’s decision does not stop the Mozambique LNG project from continuing, but it may lead other countries including Japan, Italy, South Africa, and the US to reconsider their support.
Friends of the Earth’s Rehman added: “We now urge other countries to follow suit and end their backing for this destructive project.
“The UK should instead support countries like Mozambique – which are on the frontline of the climate crisis – by helping them adapt to its impacts and invest in their abundant clean energy resources to bring affordable energy to the 60% of the country locked into energy poverty.”
The Mozambique LNG project is regarded as a controversial fossil fuel project with grave allegations of human rights abuses and severe climate harms.
The UK initially signed up to support the LNG project in 2020, at the insistence of then-International Trade Secretary Liz Truss, and personally signed off by Prime Minister Boris Johnson. The UK withdrawing its export finance support for a project – after initially saying yes in 2020 – is said to unprecedented.
UK financing was seen as key for the project to go ahead. Campaigners believe that the UK pulling out could start a “domino effect” of other key financiers pulling out, such as the Dutch government, who have yet to make a decision on whether to go ahead with financing.
In June 2025, Oil Change International threatened the UK government with court action, saying that financing the project could put the government in breach of its international human rights obligations.