Why Companies Need Stability Solutions Like VOI for Projects in Vulnerable Regions

Local stability is not just a moral imperative but a financial one. It ensures timely execution, minimizes delays, and can translate into significant cost savings. For the Mozambique LNG project, this difference could mean a staggering $3.5 to $4 billion.

Launched as a milestone for Africa, the Mozambique LNG project was the largest foreign investment on the continent, with a price tag of $20 billion. It promised to transform Cabo Delgado, a marginalized province in Mozambique, and uplift its 2.3 million residents. However, the reality diverged sharply from these hopes.

In March 2021, the project was suspended after TotalEnergies declared force majeure due to violent insurgent attacks. Thousands of lives were lost, Palma was devastated, and project costs spiraled by billions due to delays, inflation, and supply chain disruptions.

How Did We Get Here? Stability: A Precondition for Success

In 2010, Mozambique discovered vast offshore natural gas reserves in Cabo Delgado. This led to the Mozambique LNG project, spearheaded by TotalEnergies, with a 26.5% stake. By 2019, final investment decisions were made, and construction commenced.

However, Cabo Delgado’s entrenched poverty, combined with the presence of ISIS-linked insurgents, presented a volatile backdrop. While Mozambique is one of Africa’s poorest countries, Cabo Delgado and its neighboring provinces are even more vulnerable, starkly contrasting the wealthier southern regions.

Despite these socioeconomic risks, project stakeholders relied on limited security arrangements provided by the Mozambican government and private contractors. In March 2021, a violent battle in Palma suspended operations indefinitely, underscoring the importance of addressing local stability as a foundational step.

How to Avoid This Outcome: The Case for VOI

Projects like Mozambique LNG often grapple with local distrust, elite corruption, and fragile security. VOI offers a proactive approach to mitigate these risks by focusing on socioeconomic stability.

Why VOI Matters

1. Economic Impact and Trust

   • Local communities doubted the project’s ability to deliver promised benefits. VOI bridges this gap by creating measurable, sustainable socioeconomic improvements.

   • By addressing tangible community needs, VOI fosters trust and enhances a company’s reputation.

2. Improved Socioeconomic Conditions

   • In prior VOI implementations, like in Guinea-Bissau, 98% of socioeconomic indicators improved, directly benefiting local stability and reducing risks of unrest.

3. Human Rights and Due Diligence

   • TotalEnergies lacked a structured human rights framework for the Mozambique LNG project. VOI offers a systematic, step-by-step approach to integrate social impact into project planning and execution.

   
   

While VOI doesn’t address security issues directly, it proactively tackles the underlying socioeconomic vulnerabilities that fuel instability. In doing so, it shifts local perceptions, builds trust, and creates an environment conducive to large-scale infrastructure success.

The Path Forward

For companies operating in fragile regions, stability is not just a byproduct but a prerequisite. The Mozambique LNG project illustrates the immense costs—both human and financial—of neglecting this principle. A solution like VOI equips companies to address root causes of instability, demonstrating that large infrastructure initiatives can truly uplift communities and create shared value.

By integrating stability solutions, businesses can ensure their investments lead not only to financial returns but also to lasting social and economic progress.