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As world leaders discuss climate action, U.S. government finances massive LNG project that will cause climate chaos

WASHINGTON, D.C. – The U.S. Export-Import Bank’s (EXIM) Board of Directors voted late yesterday to provide $5 billion in financing for a liquid natural gas (LNG) project in Mozambique, making it the largest federal subsidy for a fossil fuel project in the bank’s history. This final vote by the board follows a preliminary vote last month and a 35-day Congressional review period.

The board’s vote comes as U.S. Representative Rashida Tlaib (D-Mich.) and Senator Jeff Merkley (D-Ore.) led delegation letters opposing the project. Despite the opposition, EXIM charged forward with this massive fossil fuel project, which EXIM admits will directly emit at least 5.2 million tons of carbon dioxide per year. 

“EXIM’s irresponsible approval of $5 billion for LNG development in Mozambique, despite Congressional opposition, demonstrates how the bank  puts fossil fuel profits above the health of local communities and the planet,” said Kate DeAngelis, Senior International Policy Analyst at Friends of the Earth. “Congress now has the power to end EXIM’s support for fossil fuels if it chooses to reauthorize the agency.”

In addition to climate damage, the Mozambique LNG project has reportedly caused the loss of land and livelihood of local peoples, while failing to provide promised local jobs or access to electricity. In February, contractors working on the project were attacked by suspected militants, leaving at least one worker dead. Further, the project threatens the delicate Quirimbas Biosphere Reserve, a UNESCO protected site.

“If there is a project with serious alarm bells, it’s this one,” said Daniel Ribeiro of JA!/Friends of the Earth Mozambique. “This dirty project is located in a sensitive world biosphere, embroiled in an emerging extremist armed conflict. It is being pushed by a government that has recently faced one of the biggest corruption cases in Africa. This project will only fuel the numerous local land conflicts, the human rights abuses and infrastructure bottlenecks. It makes one worry about Mozambique’s future. Investment from the U.S. will only amplify all of the troubles and conflicts in Mozambique caused by this project and push them out of control.” 

Mozambique’s government is in the midst of a corruption scandal that has ensnared three international banks funding development projects in the country, triggering investigations by the SEC and FBI. At least 20 people have been reportedly been indicted by Mozambique authorities. 

The board’s approval of financing for Mozambique LNG plant comes as Congress considers reauthorizing the agency beyond 2019. Voting EXIM board members include Chairman Kimberly A. Reed and board members Spencer Bachus and Judith Pryor.

Expert contact: Kate DeAngelis, (202) 222-0747, kdeangelis@foe.org
Communications contact: Patrick Davis, (202) 222-0744, pdavis@foe.org

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