Mozambique Reaffirms $2.25 Billion Sovereign Guarantee for Gas Project Financing
Key Facts
Mozambique’s Council of Ministers approved a decision reaffirming the validity of the sovereign guarantee provided to lenders to the Mozambique LNG project in Area 1 of the Rovuma Basin, according to the government portal. The government said the guarantee was issued on April 24, 2020, and that the current decision does not constitute a new guarantee. The reaffirmation followed an update to the project’s financing documents, with the aim of ensuring continued funding and maintaining the state’s previous commitments. The guarantee covers the debt-financed share held by state-owned ENH in the Golfinho Atum project, up to a cap of $2.25 billion, according to the International Monetary Fund. The government said the decision does not in itself increase investment or project costs, but reaffirms the previous guarantee.
The $2.25 billion cap sets the maximum coverage, not the value of debt currently owed by the state. The IMF said the guarantee’s value rises with financing drawdowns until it reaches that cap. The report estimated current exposure under the guarantee at $43 million, while lenders had disbursed $287 million. These figures illustrate the difference between the maximum commitment the state could assume and the amount that had actually entered the financing by the time of the report. The exposure relates to ENH’s debt-financed share of the project, not the full financing of Mozambique LNG.
Project financing was agreed in 2020 at $15.4 billion, with around 30 lenders participating, according to TotalEnergies. In a later update, the company said the partners had agreed to compensate for the contributions of export credit agencies UKEF and Atradius with additional equity after deciding to proceed without them. The agencies’ contributions represented around 10% of external financing. The company added that lenders representing around 90% of external financing reaffirmed their commitment to fund the project in December 2025. This places the guarantee’s reaffirmation in the context of updated financing arrangements, while the project continues to rely on lender financing and partner contributions.
The Mozambique LNG consortium decided to lift force majeure on November 7, 2025, after it was declared in 2021, according to TotalEnergies. The company announced in January 2026 that it had resumed onshore and offshore project activities. At the time of the restart announcement, it said construction was around 40% complete and that more than 4,000 workers had been mobilized, including more than 3,000 Mozambicans. The project includes a liquefaction facility with two production trains and total capacity of 13.1 million tonnes per year, according to the company. TotalEnergies estimated total investment after the final investment decision at around $20 billion, while the National Petroleum Institute estimated investment at around $15.4 billion.
The project’s scale and the state’s commitment form part of the broader financial backdrop for ENH. The IMF said the company’s debt linked to gas projects could rise from $4.6 billion, equivalent to 19.6% of GDP in 2024, to $20 billion, or 22.3% of GDP, by 2045. These estimates connect the state-owned company’s commitments with long-term gas projects, while the Golfinho Atum guarantee remains limited to ENH’s debt-financed share. On the local impact, TotalEnergies expects to provide up to 7,000 direct jobs for Mozambicans during construction. It also expects the value of contracts awarded to Mozambican companies to exceed $4 billion. The company’s chief executive, Patrick Pouyanné, said the resumption of activities “marks an important milestone for the Mozambique LNG project and Mozambique,” and thanked President Daniel Chapo and the authorities for their commitment to the project.
The company is targeting the start of liquefied natural gas production in 2029, a date announced when work resumed. The target follows the lifting of force majeure and the resumption of activity at the onshore and offshore sites, while EL7 data show TotalEnergies shares closed at $92.78 on October 23, 2026. This reading alone does not indicate how the market responded to the guarantee decision. The next steps remain tied to construction progress and continued financing under arrangements with the partners and lenders. The guarantee cap also remains part of the previous commitment whose validity the government reaffirmed, rather than representing a new increase in investment.