Friends of the Earth sues Britain over Mozambique LNG project

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Members of Young Friends of the Earth Europe demonstrate during the World Climate Change Conference 2015 (COP21) at Le Bourget, near Paris, France, December 7, 2015. REUTERS/Stephane Mahe

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LONDON, Dec 7 (Reuters) - Friends of the Earth said a legal challenge to the British government which seeks to block a $1.15 billion financing for a Liquefied Natural Gas (LNG) project in Mozambique will be heard in the High Court on Tuesday.

UK Export Finance (UKEF) has committed to provide up to $1.15 billion of direct loans and guarantees to banks to support the design, build and operation of the $20 billion LNG project led by French energy company TotalEnergies (TTEF.PA).

Friends of the Earth said in a statement that the project was incorrectly judged to be compatible with the Paris climate agreement, without proper assessment of its climate impacts.

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The environmental pressure group also said that the project contradicts Britain's obligation to help other countries meet their own climate targets and that the government should instead invest in renewable energy and other sustainable projects.

"The UK has poured an eye-watering amount of taxpayer money into developing a huge new gas field in Mozambique right in the middle of a climate emergency," Will Rundle, head of legal at Friends of the Earth, said.

"We remain confident that UK Export Finance follows robust and internationally recognised due diligence before providing any support for overseas projects," a British government spokesperson said, adding: "We do not comment on ongoing legal proceedings".

A TotalEnergies spokesman said that the government in Mozambique had shown strong support for the project, which is a fundamental part of the southern African country's energy plan.

"TotalEnergies EP Mozambique Area 1 Limitada and Moz LNG1 Financing Company Limited are supporting the UK Government‘s decision to finance this project, and are not in the position to comment on a pending judicial case, where they are not the Defendant," the spokesman said.

The gas project is seen by some as critical to transforming the economy and development of Mozambique, one of the world's least developed nations, but environmental campaigners say LNG projects, while cleaner than other fossil fuels, still lock in harmful emissions for decades.

In April, TotalEnergies declared force majeure on the LNG project following insurgent attacks. read more

The only drawdown on the UKEF financing has been for payment of the UKEF premium and so its net exposure is currently zero.

In September, UKEF published a new Climate Change Strategy, setting out its objectives to decarbonise its portfolio after Prime Minister Boris Johnson said in April that Britain would cut carbon emissions by 78% by 2035, almost 15 years earlier than planned. read more

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Reporting by Marwa Rashad; additional reporting by Benjamin Mallet in Paris; Editing by Jane Merriman and Alexander Smith

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