Environmental advocacy organisations have launched a legal case against the United States Export-Import Bank (EXIM), accusing it of unlawfully re-approving a $4.6 billion loan to the Mozambique LNG project, which is currently under development in the conflict-affected Cabo Delgado province. The claim, filed jointly by Friends of the Earth US, Mozambique’s Justiça Ambiental, and EarthRights International, alleges that EXIM violated its own Charter and multiple federal regulations when it reinstated the financing in March 2025.
The lawsuit contends that EXIM failed to perform the necessary environmental and economic assessments before proceeding with its decision, thereby neglecting due diligence obligations as mandated by both US law and international standards. The case also draws attention to EXIM’s procedural shortcomings, asserting that the re-approval process was expedited without adequately considering risks to local communities or environmental impacts.
In an earlier interruption to the project, operations had been suspended in 2021 after attacks by Islamist insurgents in the Cabo Delgado region resulted in dozens of casualties among project workers. Following this escalation in regional violence, French energy company TotalEnergies, the principal operator of the Mozambique LNG project, declared a state of force majeure, halting development indefinitely. While some security has since returned to the region, the project has yet to resume full operations.
Critics of the project have repeatedly raised concerns regarding the socio-environmental costs associated with the development. According to investigations by local civil society groups such as Justiça Ambiental, the liquefaction terminal is being constructed on over 6,600 hectares of land, much of which was previously used by local communities for subsistence farming and fishing. These organisations argue that the resettlement and compensation process has been inadequate, with many families losing access to both land and sea-based livelihoods.
A spokesperson from TotalEnergies previously stated that by the time the force majeure was declared, approximately 89% of compensation payments had been completed within six months of signing agreements, and 66% within 90 days. However, the company also acknowledged that the implementation of these processes has been hindered by the deteriorating security situation in the region.
Kate DeAngelis, deputy director for economic policy at Friends of the Earth US, stated that EXIM’s conduct reflects a broader pattern of regulatory disregard. She emphasised that the bank has an institutional obligation to ensure US taxpayer funds are not committed to high-risk international projects lacking proper oversight or community safeguards.
Similarly, Richard Herz of EarthRights International highlighted alleged human rights violations at the project site, including reports implicating project security in serious incidents involving local civilians. Herz described the re-authorisation of funding as “beyond reckless”, asserting that EXIM has failed to consider the documented threats to both the local population and environmental integrity.
The lawsuit points to what it describes as a troubling precedent whereby public funds are used to underwrite fossil fuel ventures that may conflict with national and international climate objectives. Justiça Ambiental further stressed that continued investment in gas infrastructure in Cabo Delgado would disregard the perspectives of displaced communities and undermine Mozambique’s legal and environmental commitments.
In response to enquiries regarding the lawsuit, a spokesperson for the Export-Import Bank reiterated the institution’s adherence to legal and regulatory frameworks. The bank refrained from commenting directly on the case, citing its longstanding policy not to discuss ongoing litigation. However, EXIM affirmed its mission of supporting US employment through the facilitation of international exports and stated that it continues to operate in accordance with applicable laws.
This legal challenge adds to the broader discourse on the intersection between international development finance, human rights, and climate change. It raises critical questions about the responsibilities of public financial institutions when funding large-scale fossil fuel projects in regions beset by conflict and displacement. As the case unfolds, its implications could influence future lending practices and environmental due diligence standards for state-backed financial institutions operating globally.
