The British government announced Monday it would no longer provide TotalEnergies with a loan intended for a gas project in Mozambique.

According to France24, the French group had previously halted the project due to a jihadist attack in the area.

This decision means the UK will withhold up to $1.15 billion in funding for the liquified natural gas project. It comes despite a consortium led by TotalEnergies announcing in October that it would lift the suspension on the work, which had been imposed in 2021 following the deadly violence.

Business Secretary Peter Kyle issued a statement explaining the government’s stance: “Whilst these decisions are never easy, the government believes that UK financing of this project will not advance the interests of our country.”

UK Export Finance (UKEF), a government agency, is responsible for the decision to halt financing for the project. The project was originally expected to bring benefits to Britain.

The $20-billion LNG project was paused after a bloody jihadist attack that resulted in the deaths of an estimated 800 people.

TotalEnergies subsequently lifted the force majeure it had declared after the siege. The company then sought $4.5 billion in cost overruns linked to the delay, which it demanded be covered by the Mozambique government.

The company, which holds a 26.5 percent stake in the project, has expressed hope of resuming production at the gas site in 2029, conditional upon the African country’s approval of its new budget plan.

Meanwhile, the UK government is still focused on supporting its exporters. Kyle added on Monday: “We also remain committed to our national partnership with Mozambique and building long-term respectful relationships with African countries to boost sustainable growth, tackle the climate crisis and address insecurity.”

Mozambican and international NGOs have leveled accusations against TotalEnergies. They claim the French group is holding Mozambique “hostage” over demands for “ultra-favourable” conditions to restart its gas project in the country’s restive northeastern Cabo Delgado province.

Several gas projects in this region, which also involve the Italian group ENI and American oil giant ExxonMobil, have the potential to significantly boost the country’s output. A 2024 report by the audit firm Deloitte stated that these projects could “make Mozambique one of the world’s top ten (natural gas) producers, contributing 20 percent of African production by 2040.”

Environmental groups have strongly criticized the projects, labeling them as “climate bombs” that would offer little financial advantage to the people of Mozambique. This is a significant concern given that more than 80 percent of the population lived below the poverty line of three dollars per day in 2022, according to the World Bank.