Mozambique is increasingly one of the strategic countries for gas, with all that this entails. The Italian Saipem has in fact announced that in July it will resume work on the construction of Mozambique LNG, a natural gas liquefaction plant owned by the French fossil multinational Total. The project was suspended in 2021 following violence by insurgent groups in the northern province of Cabo Delgado. Since it began in 2017, the armed insurgency has claimed more than 4,000 lives and displaced one million people. Last year, the Comboni nun Maria De Coppi was killed in the village of Chipene.
The Italian Eni is already active in the area with the Coral South FLNG offshore project, but above all it is the leader of the very precious Rovuma LNG. Estimated value of 30 billion dollars, the project involves the construction of a plant on land for the processing and export of gas from 24 submarine wells. It is estimated that 15 million tons of gas a year can be processed to then take over, above all, the European markets, orphaned by the fossil fuels supplied by Russia. The restart of the works for Mozambique LNG should also lead to Rovuma.
In reality, the CEO of Saipem, Alessandro Puliti, recently specified that the company does not have an exhaustive picture of the situation in the field, but in fact relies on Total and its safety assessments. In Cabo Delgado, in an attempt to pacify the area, there are currently contingents of both the local and Rwandan armies, the latter deployed following the 2021 agreements between the Maputo and Kigali executives.
It is not only the human rights impacts and social consequences that are of concern. The projects linked to the exploitation of gas will increase Mozambique’s emissions by 14 percent a year, exacerbating a climate crisis that is already making its terrible effects felt in the African country in the form of extreme events. In 2019, Cyclone Idai caused the death of about 1,500 people and damages of over three billion dollars, while the economic and social impacts of Cyclone Freddy, which recently hit the country, are still being calculated. Betting everything on gas is therefore equivalent to saying goodbye to the energy transition and making an interested contribution to the fight against the climate crisis.
The doubts and misgivings about whether or not these projects are appropriate by now no longer concern only environmental groups and the communities impacted, but also seem to involve lenders, who are of fundamental importance for works costing billions of dollars. It is not surprising, then, that there are already those who are calling themselves out, such as the Italian bank UniCredit and the transalpine BNP Paribas. It should be noted that the two lenders are Eni’s main lenders – between 2016 and 2022 UniCredit supported the six-legged dog with 5.8 billion dollars. Rovuma does not comply with the guidelines on deep-water extraction included in the Milanese institute’s environmental policy, which is why this time the support for Eni did not materialize.
Still on the financial front, for now only the International Development Finance Corporation of the United States has provided a risk guarantee on Rovuma LNG for an amount of 1.5 billion dollars, while the French lender Crédit Agricole has agreed to carry out the task of financial advisor for the project. But it is not excluded that there may be news in the coming weeks, also from other important Italian subjects. For example, Intesa Sanpaolo, the most important Italian bank, which like UniCredit participated in the financing of Coral South in 2017. And then there is Sace, the Italian public insurer. Between 2016 and 2021, Sace issued guarantees to oil & gas projects for a total of 13.7 billion euros.
These projects include Coral South FLNG worth $700 million and Mozambique LNG worth $950 million.