Global Policy Shifts Delay African Energy Projects – Lessons from Mozambique LNG
Political and policy changes in major international financing hubs are increasingly affecting Africa’s energy sector, with the Mozambique Liquefied Natural Gas (LNG) project highlighting the high cost of such uncertainty.
Large oil and gas projects across Africa, often reliant on export credit agencies and foreign government support, are particularly vulnerable to evolving climate policies, security reassessments, and domestic political agendas in external markets. The Mozambique LNG project illustrates how these shifts can delay development, increase financing costs, and complicate long-term planning.
The TotalEnergies-led project has faced multiple setbacks since the 2021 insurgent attack in Cabo Delgado, requiring extensive redesigns and staged restarts. In early 2025, the US Export-Import Bank approved a near-$5 billion loan to support its revival, signalling renewed US backing for major natural gas developments.
However, shortly afterwards, the UK withdrew $1.15 billion in previously committed financing, citing heightened security concerns and revised climate-policy guidance. This reversal reintroduced uncertainty into the project’s complex financial structure and disrupted Mozambique’s timeline for restoring momentum.
The contrasting approaches underline the challenge African governments and developers now face: project viability depends not only on technical fundamentals but also on political cycles, investment mandates, and climate-policy debates in external jurisdictions. Withdrawals or delays by foreign partners often lead to renegotiated lending terms, postponed contracts, and heightened commercial risk.
For Mozambique, rebuilding financing commitments increases both costs and project timelines. It also complicates domestic planning, from revenue projections to employment expectations. Operators must now demonstrate enhanced security, improved community engagement, and robust environmental safeguards to reassure investors.
Across the continent, international policy volatility is shaping investor sentiment. Many African governments are exploring alternative financing options, including multilateral institutions and regional capital providers, though these come with differing conditions and approval processes.
Platforms such as African Energy Week (AEW) have emerged as critical stabilising venues, allowing governments, financiers, and operators to align investment priorities and respond collectively to external policy uncertainty.
The 2026 edition in Cape Town, focused on energy security and resilient investment frameworks, provides an opportunity to develop risk-mitigation tools and long-term financing structures that protect African projects from sudden foreign policy reversals.
The Mozambique LNG experience underscores a broader lesson: Africa’s ambitious energy plans require predictable, consistent international support and stronger Africa-led coordination to translate strategy into tangible, sustainable development.
