Navigating Decisions

The report examines the risks associated with LNG export projects in Mozambique, particularly those involving the European Union. It finds that these projects have caused social displacement, environmental damage, and increased sovereign debt without delivering promised economic development. The authors argue that the 'gas for development' narrative is unsupported by evidence, as Cabo Delgado's socio-economic conditions have worsened since gas discoveries. Financial risks include volatile global gas prices, declining long-term demand due to the energy transition, and contractual designs that delay government revenues until the 2030s. Furthermore, the report highlights an erosion of sovereignty through investor-state dispute settlement (ISDS) mechanisms and the prioritization of infrastructure security over civilian protection. It recommends that Mozambique reassess operational projects, halt new LNG developments, and prioritize sustainable economic diversification.

• LNG development in Mozambique has caused significant social and environmental harm, including the forced relocation of over 550 households for the Afungi Park and the destruction of forests, wetlands, and shorelines.
• There is a plausible link between the presence of gas projects and the violent insurgency in Cabo Delgado, as local populations feel excluded from the economic benefits while foreign workers are prioritized.
• Public financial support for LNG has been disproportionately high compared to renewable energy; international public finance for the Mozambique LNG project was estimated at USD 13.8 billion, which is 60 times greater than the EUR 201 million reported for renewables by the end of 2020.
• The Mozambican government faces significant sovereign liability and debt, with USD 2.9 billion in sovereign guarantees issued for the national oil company (ENH) to participate in the Mozambique LNG and Coral South projects.
• Contractual designs for LNG projects delay the bulk of government revenues until the mid-2030s and 2040s, leaving the state exposed to future market volatility and the global transition away from fossil fuels.
• Mozambique's sovereignty is eroded by international investment laws and stabilization clauses that protect investors via the investor-state dispute settlement (ISDS) system, potentially preventing the government from implementing environmental or climate regulations.
• The 'gas for development' strategy has failed to materialize; since the 2010 gas discoveries, Mozambique's GDP growth has decreased while debt, inequality, unemployment, and poverty have increased.

APA

Halsey, R., Bridle, R., Vazi, B., & Geddes, A. (2023). Navigating Decisions. International Institute for Sustainable Development. https://www.iisd.org/system/files/2023-12/navigating-decisions-lng-exports-risks-mozambique.pdf

Chicago

Halsey, Richard, Richard Bridle, Bathandwa Vazi, and Anna Geddes. Navigating Decisions. International Institute for Sustainable Development, 2023. https://www.iisd.org/system/files/2023-12/navigating-decisions-lng-exports-risks-mozambique.pdf.

Wikipedia

{{cite report |last1=Halsey |first1=Richard |last2=Bridle |first2=Richard |last3=Vazi |first3=Bathandwa |last4=Geddes |first4=Anna |title=Navigating Decisions |publisher=International Institute for Sustainable Development |date=December 2023 |url=https://www.iisd.org/system/files/2023-12/navigating-decisions-lng-exports-risks-mozambique.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{halsey2023navigating, author = {Halsey, Richard and Bridle, Richard and Vazi, Bathandwa and Geddes, Anna}, title = {{Navigating Decisions}}, institution = {International Institute for Sustainable Development}, year = {2023}, month = dec, url = {https://www.iisd.org/system/files/2023-12/navigating-decisions-lng-exports-risks-mozambique.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }