The company behind Uganda’s East African Crude Oil Pipeline (EACOP) has secured its first tranche of external financing from a consortium of financial institutions, including commercial banks and Afreximbank, EACOP Ltd announced on Wednesday.
Among the financiers are Standard Bank, Stanbic Bank Uganda, KCB Bank Uganda, and Saudi Arabia’s Islamic Corporation for the Development of the Private Sector.
“The successful closing of this first tranche represents a significant milestone,” the company stated, though it did not disclose the exact value of the financial support.
EACOP is a key part of a $15 billion energy initiative led by TotalEnergies, China’s CNOOC, and other partners to develop the Kingfisher and Tilenga oil fields near Lake Albert.
In October 2023, Uganda’s Energy Minister revealed that developers were injecting additional funds into the $5 billion pipeline project to keep it on track amid difficulties in securing debt financing.
EACOP, which will transport crude oil from Uganda’s Lake Albert region to Tanzania’s Tanga port, has faced strong opposition from environmental groups and international advocacy organizations.
Critics argue that the project could cause environmental damage and displace local communities.
Due to these concerns, six Western banks, including BNP Paribas, Société Générale, and Barclays, declined to finance the project, according to Sputnik.
In response, Uganda’s Energy Minister, Ruth Nankabirwa, traveled to Beijing to seek financial support from Chinese institutions, which are now playing a crucial role in securing the necessary funding.
A source familiar with the financing confirmed that commitments have now been secured for the full $5 billion, with substantial backing from Chinese financial institutions.
