LONDON: International lenders have lined up about $9.5 billion in financial support for a Russian Arctic liquefied natural gas (LNG) project, a document seen by Reuters showed, even as such projects come under greater scrutiny over climate concerns.
The $21 billion project, which received final investment approval a year ago, is expected to be launched in 2023 and to reach its full capacity of almost 20 million tons per year in 2026.
While the energy industry touts natural gas as a cleaner alternative to coal or crude, it is a source of carbon emissions and critics say LNG projects are hard to reconcile with the transition to low-carbon economy envisaged in the Paris climate agreement and the EU鈥檚 Green Deal economic plan.
The interest of international institutions, however, gives a boost for the Arctic LNG 2 development, led by Russian non-state company Novatek as Moscow鈥檚 plans to raise its share in the global LNG market.
Among them is French state investment bank and credit agency Bpifrance, with an offer of $700 million in credit finance and Germany鈥檚 Euler Hermes, with a covered facility of $300 million, the document said.
Alongside Bpifrance鈥檚 support, the document said a number of other state-backed institutions are also expected to help fund the project including the China Development Bank, which is expected to offer a facility equivalent to $5 billion.
The Japan Bank for International Cooperation is also seen providing a facility of $2.5 billion; an unnamed Russian bank $1.5 billion and Italy鈥檚 SACE a covered facility of $1 billion.
Russian top lender Sberbank has already earlier said it was ready to provide more than 鈧�2.7 billion ($3.2 billion) in financing for the project, which aims to process gas from the Gydan Peninsula and ship 80 percent of LNG to Asia.

The lineup described in the document, if backed in full, would cover the need for the external financing, earlier estimated by Novatek at $9 to $11 billion.
The project鈥檚 equity partners include France鈥檚 Total, China National Petroleum Corp, China鈥檚 CNOOC and the Japan Arctic LNG consortium made up of Mitsui & Co. and state-owned JOGMEC, formally known as Japan Oil, Gas and Metals National Corp.
While Bpifrance鈥檚 recommendation, detailed in an internal document, comes with caveats and could yet be rejected by the government, its support highlights the importance of
the project for one of France鈥檚 industrial champions.
The document said Bpifrance Assurance Export gave a 鈥渇avorable opinion鈥� to the strategic project guarantee 鈥渟ubject to subsequent examination of the project鈥檚 risk profile and its economic fundamentals鈥� and with a 鈥渟trong reserve鈥� waiting for the finalization of the environmental and social analysis.
Bpifrance and Total both declined to comment and Novatek had no immediate comment.
Relations between Europe and Russia, including energy, remain tense after a poisoning attempt of Russian opposition politician Alexei Navalny sparked calls for another key energy project between the two, Nord Stream 2, to be ditched.
The role of European development institutions in bank-rolling LNG projects around the world has also come under greater scrutiny given EU鈥檚 ambitious climate goals.
Export credit agencies such as Bpifrance provide government-backed loans, guarantees, credits and insurance to private companies to help make it easier for them to do business abroad.
A spokeswoman for JBIC, which has already announced one loan for up to 鈧�125 million to help Mitsui & Co. and the Japan Oil, Gas and Metals National Corporation take an equity stake in the venture, declined to comment on the Bpifrance document as she could not confirm the figure.
SACE declined to comment. CDB did not immediately reply to a request for comment. Euler Hermes directed the question to the Federal Ministry of Economic Affairs and Energy.
The ministry said it was not 鈥渘ot authorized to provide third parties with any information in this respect.鈥�