Africa’s $20 Billion Gas Investment Backed By 7 Countries

by Anshul Dash

The country of Mozambique has recently declared a project to extract, liquefy, and export gas. The project is worth $20 billion and has been backed up by seven countries: The US, Japan, The UK, Italy, The Netherlands, South Africa, and Vietnam. In addition to these countries, The African Development Bank and 19 other commercial lenders are also contributing to the project.

The project has been seen as a significant achievement from oil tycoons such as Total, a French oil major that acquired a 26.5% stake in the project last year. However, climate analysts view the project differently, stating that increased production and export of fossil fuels conflict with international climate goals. Governments are reportedly planning to extract 47% more gas by 2040 than what is being collected now. Total and other investors are planning to develop two gas fields in the Cabo Delgado province of northern Mozambique. They are also planning to build a plant capable of liquifying 13.1 million tons a year for export.

Residents in the area hoped jobs and investment would come along with the gas discovery. Instead, they are now facing an Islamic insurgency. This insurgency has resulted in 600 deaths since 2017, with gas workers being primary targets. Families have been evicted from their homes and land without compensation while watching well-paid jobs go to people of higher status. However, Total denies that there was any forced eviction and states that the Islamic insurgency is not related to gas development. 

A lot of attention has come from the support of the UK. The UK’s decision to back up the project has led many to realize that it is contradicting the government’s mission to be the host of the UN Climate Summit, Cop26, in November 2021. According to the business secretary and Cop26 president Alok Sharma, “[Their] aim is to ramp up ambition towards a climate-resilient, zero-carbon economy.” At last month’s London Climate Action Week, Sharma requested all countries to make deeper emissions cuts by 2030 and aim for net-zero emissions. Sharma clarified his request by saying “we must… make sure that climate risk is factored into every single investment decision taken around the world.”