Mozambique: European Union ends support for Rwandan troops

The European Union's decision to end military support for Rwandan forces operating in Mozambique's northern insurgency campaign marks a strategic shift with immediate implications for the country's $20 billion liquefied natural gas (LNG) sector and broader investor confidence.

Since 2021, Rwanda deployed approximately 1,000 troops to combat the ISIS-affiliated insurgency in Cabo Delgado province, where TotalEnergies' flagship Coral FLNG facility and the projected Mozambique LNG project (operated by ExxonMobil and partners) face persistent security threats. The EU, alongside the African Union, had provided logistical and financial backing for this operation. The sudden withdrawal signals not just a tactical recalibration, but a reassessment of Mozambique's political stability following the contested October 2024 elections.

## Why is Rwanda's role in Mozambique so critical for LNG?

The Cabo Delgado insurgency has disrupted energy infrastructure and displaced over 700,000 people since 2017. Rwandan forces were credited with containing militant advances near key production zones, providing a security buffer that underpinned lender and insurer confidence in LNG project viability. Without external military support, Mozambique's own defense capabilities—already stretched—face renewed pressure. This directly threatens the timeline and bankability of ExxonMobil's second-phase LNG expansion, estimated to cost $10+ billion.

The EU's withdrawal is rooted in political concerns. The August 2024 disputed election results and subsequent civil unrest prompted Brussels to reassess its regional military commitments. EU sources indicated that supporting a foreign military presence in a country with questioned democratic legitimacy created reputational and legal risks. For investors, this translates to one fewer security pillar in an already volatile operating environment.

## What happens to LNG projects now?

TotalEnergies' Coral FLNG has maintained partial production despite security challenges, but expansion plans depend on stabilized conditions. The Mozambique LNG project—stuck in front-end engineering and design (FEED) phase—relies on international financing. Banks and export credit agencies (ECAs) use security assessments as a condition for capital release. Rwanda's withdrawal removes a tangible risk-mitigation asset from the investment case.

Mozambique's government, led by newly inaugurated Daniel Chapo (FRELIMO), is under pressure to either expand domestic military capacity or negotiate alternative security partnerships—potentially with South Africa, Angola, or private military contractors. Each option carries cost and political implications. South African intervention risks deepening regional tensions; private contractors lack the scale Rwanda provided.

## Can Mozambique stabilize LNG without Rwanda?

Short-term volatility is inevitable. Insurance premiums for personnel and assets in Cabo Delgado will likely spike. Project timelines may slip by 6–12 months as developers implement alternative security protocols. However, the fundamental LNG resource—Africa's largest untapped reserves—remains attractive to risk-tolerant operators. Chinese and Indian investors, less constrained by EU democratic conditionality, may increase exposure, reshaping the project's financing architecture away from Western institutions.

The real test arrives in Q1-Q2 2025, when lenders formally review security assumptions for the next funding tranche. If Mozambique cannot demonstrate tangible progress—either militarily or diplomatically—against the Cabo Delgado threat, LNG capex could contract sharply, delaying first gas from 2027–2028 to 2029+.

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