WASHINGTON, August 20, 2026– The U.S. Court of Appeals for the District of Columbia Circuit has refused to block a nearly $4.7 billion U.S. Export-Import Bank loan for a liquefied natural gas project in northern Mozambique, allowing the financing to proceed while environmental groups continue challenging the legality of the arrangement.
However, in Friends of the Earth U.S. v. Export-Import Bank of the United States, No. 25-5387, a three-judge panel affirmed the lower court’s denial of a preliminary injunction requested by Friends of the Earth U.S. and Justiça Ambiental, a Mozambican environmental organization. The request was aimed at stopping the disbursement of loan money and invalidating the U.S. government’s financial commitments to the project.
It should be noted that the decision is not a final verdict regarding all the issues in the lawsuit itself. On the contrary, the court held that the groups had not shown the likelihood of success on the merits required for preliminary relief.
This financing will facilitate the TotalEnergies Mozambique LNG Project in the Cabo Delgado province. The project is based on natural gas resources estimated at approximately 65 trillion cubic feet, according to the D.C. Circuit’s opinion. The Export-Import Bank authorized the proposed financing in 2019, whereby the Export-Import Bank authorized up to $5 billion in financing for the project. The official 2019 announcement said the project was expected to involve goods and services from multiple U.S. states.
The bank later amended the financing. By 2020, the approved transaction had been revised to $4.7 billion and expanded to cover offshore production. The project is operated by TotalEnergies EP Mozambique Area 1.
Construction on the project was suspended in April 2021 after attacks by an Islamic State-linked insurgency commonly referred to as Al-Shabab. The attacks in Cabo Delgado province led to civilian deaths, the displacement of residents, and the evacuation of project workers.
With the improvement in security conditions, the project proceeded to prepare for resumption of construction. An amendment was adopted by the Export-Import Bank on March 13, 2025, extending certain deadlines by four years and permitting the previous approval of financing to proceed on a new schedule. In the view of the court, the amendment did not substantially alter the financing structure of the project.
The plaintiffs claimed that the 2025 amendment amounted to a new financing decision. They maintained that the bank was required to conduct new analyses of the economic impact and the environment, and give notice and opportunity for comment as required under the National Environmental Policy Act, Export-Import Bank Act, and Administrative Procedure Act.
The court rejected several of the groups’ standing arguments. It ruled that the inability of the organizations to participate in the public comment process constituted a general procedural claim and not an individual harm. In addition, the appeals court ruled that the organizations’ allegations based on speculative increased demand for their services were not sufficient because of many decisions that would have to be made by the project operator, insurgents, the government of Mozambique and the affected population.
The appeals court nevertheless recognized that the groups had shown a substantial likelihood of informational standing concerning environmental records. The organizations claimed that the bank had not disclosed environmental impact statements and other documents mandated under federal law. This was deemed insufficient for establishing likelihood of success on the merits issue.
Senior Circuit Judge Randolph concurred in part and dissented in part, yet the decision of the panel still stands. The case highlights a broader dispute over federal financing for overseas fossil-fuel projects and the environmental and transparency requirements that should apply to them.
The Export-Import Bank has described the transaction as one of the largest in the agency’s history.
