UK's $1.15 bln funding for Mozambique LNG project is lawful -court

FILE PHOTO-A sign with the logo of French oil and gas company TotalEnergies is pictured at a petrol station in Bouguenais near Nantes, France, November 14, 2022. REUTERS/Stephane Mahe

LONDON, Jan 13 (Reuters) - The British government's funding of up to $1.15 billion for a liquefied natural gas (LNG) project in Mozambique is lawful, a London court ruled on Friday, dismissing an appeal by Friends of the Earth.

The environmental campaign group had asked London's Court of Appeal to rule the British government wrongly decided funding the project, led by French energy company TotalEnergies (TTEF.PA), was compatible with the Paris Agreement on climate change.

UK Export Finance (UKEF) has committed to provide direct loans and guarantees to banks to support the design, build and operation of the $20 billion project.

Friends of the Earth's legal action over the decision failed in a lower court and was dismissed by the Court of Appeal in a written ruling on Friday.

Judge Geoffrey Vos said the Paris Agreement was "only one of a range of factors" UKEF took into account when reaching the decision to fund the project.

The judge added that UKEF's view that funding the project was aligned with the UK's obligations under the Paris Agreement was "tenable" and that there was no requirement for it to be "certain that the decision complied with those obligations".

Friends of the Earth described the ruling as "extremely disappointing" and said it is considering an appeal to the UK Supreme Court.

"This extremely disappointing judgment doesn't alter our firm belief that the UK government should not be supporting the Mozambique gas project, or any fossil fuel project at home or abroad," Rachel Kennerley, an international climate campaigner with the group, said in a statement.

A UKEF spokesperson welcomed the court's decision.

"We remain confident that UK Export Finance follows robust and internationally recognised due diligence before providing any support for overseas projects," the spokesperson said.

A spokesperson for TotalEnergies also welcomed the ruling, saying the project "will deliver a range of social and economic benefits to Mozambique and is a key part of Mozambique's aim to diversify its economy".

"TotalEnergies supports the goals of the 2015 Paris Agreement, which calls for reducing greenhouse gas emissions in the context of sustainable development and the fight against poverty," the spokesperson added.

Reporting by Sam Tobin; editing by Sarah Young, Kylie MacLellan and David Evans

Our Standards: The Thomson Reuters Trust Principles.