A US senator has slammed the Export-Import Bank of the United States (US Exim) for its backing of a US$20bn LNG project in Mozambique, arguing the state agency rushed its decision and failed to notify Congress.
In a letter to US Exim’s leadership this week, Democrat Jeff Merkley claims the export credit agency (ECA) should have consulted US Congress before re-approving a US$4.7bn loan to French energy major TotalEnergies’ project in March.
Total is seeking to restart development of its offshore LNG development, which was halted in 2021 following a nearby terrorist insurgency that prompted the company to declare force majeure.
The status of a US$14.9bn project financing package has been a key stumbling block for Total’s plans, yet several ECAs – including US Exim – have now recommitted their support.
In his letter, Merkley says US Exim’s board breached its “statutory requirement” to notify lawmakers and allow feedback before acting on a large transaction.
“I write to express my frustration that the Export-Import Bank of the United States failed to notify Congress before updating and approving its commitment to the Mozambique LNG project,” says the senator for Oregon.
Merkley states that he “regularly” utilises the notifications process, adding: “In response to Exim’s past notices I have requested briefings and submitted comments on projects. If Exim had provided notice about considering a loan for this project, I would have requested a briefing on this project prior to its approval and offered written comment.”
The senator also raises governance concerns, pointing out that US Exim’s three-person board, which currently includes two temporary appointments, acted beyond its station.
“Exim voted to move forward with Mozambique LNG with just one congressionally confirmed board member. That means the board lacks the members necessary to establish a quorum or hold votes in compliance with its bylaws or its organic statute,” he says.
In February, US President Donald Trump named agency veteran James Cruse as acting chair and James Burrows as acting first vice-president. The White House’s pick to lead the agency, John Jovanovic, is awaiting senate confirmation.
Merkley further argues that the Mozambique project has “materially” changed since the original 2019 approval.
“The primary operator, American company Anadarko, sold its stake to French company TotalEnergies. TotalEnergies then declared Force majeure and abandoned Mozambique LNG for four years.”
He argues the international LNG landscape has now “shifted” amid a boom in US liquefied gas exports, which have “more than doubled”.
“Today Mozambique LNG is riskier, led by a foreign company and competing directly with LNG export terminals proposed in the US,” he says.
US Exim has previously stated it did not require additional congressional approvals as it was merely updating the 2019 financing agreement.
In a March statement, when financing was approved, it said: “This second amendment, which contains no material change from the original approval and thus is not subject to additional US congressional notification, extends certain dates and makes related changes in connection with the restart of project construction operations.”
Activist groups have echoed Merkley’s concerns, claiming there are fresh economic and social risks that US Exim failed to evaluate. Last month, activist group Friends of the Earth filed a civil suit against the US agency, alleging various breaches of its charter.
Merkley, who is a member of a subcommittee that conducts oversight of US Exim, claims the LNG development will have “grave human rights and climate impacts for decades” and he has “deep concerns” over the project.
Human rights abuses are a key concern for NGOs.
As first reported by Politico last year, Mozambique security forces operating from the site have been accused of massacring at least 97 civilians in 2021.
In March, French prosecutors launched a judicial investigation into TotalEnergies over potential manslaughter and a failure to help people during the initial attack by Islamic State-linked militants, allegations the energy company has strongly denied. US Exim was not immediately available for comment.
US Exim was not immediately available for comment.
