LONDON (Reuters) – International lenders have forecast around $ 9.5 billion in financial support for a Russian liquefied natural gas (LNG) project in the Arctic, a document viewed by Reuters showed, even as these projects are subject to further consideration of climate concerns.

The $ 21 billion project, which received final investment approval a year ago, is expected to launch in 2023 and reach full capacity of nearly 20 million tonnes per year in 2026.

As the energy industry presents natural gas as a cleaner alternative to coal or crude, it is a source of carbon emissions and critics say LNG projects are difficult to reconcile with the transition to a low carbon economy envisioned in the Paris climate agreement and the European Union Green Deal Economic Plan.

The interest of international institutions is however giving a boost to the development of Arctic LNG 2, led by the Russian non-state company Novatek as Moscow plans to increase its share in the global LNG market.

Among them, the investment bank and the French state credit agency Bpifrance, with an offer of $ 700 million in credit financing, the China Development Bank, which is expected to offer a facility of $ 5 billion and the German Euler Hermes, with a covered facility of $ 300 million, according to the mentioned document.

In addition to support from Bpifrance, the document says a number of other state-backed institutions are also expected to help finance 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 as providing a $ 2.5 billion facility; an anonymous Russian bank of $ 1.5 billion and the Italian SACE a covered facility of $ 1 billion.

The main Russian lender Sberbank has already said earlier that it is ready to provide more than 2.7 billion euros in financing for the project, which aims to process gas from the Gydan Peninsula and ship 80% of the LNG. to Asia.

The range described in the document, if fully supported, would cover the external financing need, previously estimated by Novatek at between $ 9 billion and $ 11 billion.

The project’s financial partners include the French Total, the China National Petroleum Corp, the Chinese CNOOC and the Japan Arctic LNG consortium made up of Mitsui & Co and the state-owned JOGMEC, formerly known as Japan Oil, Gas and Metals. National Corp.

While Bpifrance’s recommendation, detailed in an internal document, is accompanied by reservations and could still be rejected by the government, its support underlines the importance of the project for one of the French industrial champions.

The document specifies that Bpifrance Assurance Export gave a “favorable opinion” to the strategic guarantee of the project “subject to a subsequent examination of the risk profile of the project and its economic fundamentals” and with a “strong reservation” in the waiting for the finalization of the environmental and social analysis.

Bpifrance and Total both declined to comment and Novatek made no immediate comment.

Relations between Europe and Russia, including in the field of energy, remain strained after an attempt to poison Russian opposition politician Alexei Navalny sparked calls for the abandonment of a another key energy project between the two, Nord Stream 2.

The role of European development institutions in financing LNG projects around the world has also come under closer scrutiny given the EU’s ambitious climate targets.

Export credit agencies such as Bpifrance offer state-guaranteed loans, guarantees, credits and insurance to private companies to help them facilitate their operations abroad.

A spokesperson for JBIC, which has already announced a loan of up to 125 million euros ($ 148.29 million) to help Mitsui & Co and the Japan Oil, Gas and Metals National Corporation take a stake in the company, declined to comment on the Bpifrance document because it could not confirm the figure.

SACE declined to comment. The CBD did not immediately respond to a request for comment. Euler Hermes addressed the question to the Federal Ministry of Economics and Energy.

The ministry said it was “not authorized to provide information in this regard to third parties.”

($ 1 = 0.8430 euros)

Reporting by Simon Jessop in London, Katya Golubkova and Vladimir Soldatkin in Moscow, Benjamin Mallet in Paris, Takashi Umekawa in Tokyo and Cheng Leng in Beijing; Editing by Tomasz Janowski