Energy and Minerals Minister , Ruth Nankabirwa and her Finance Matia Kasaija at the Ministry of Energy's Boardroom. They confirmed that China is to lend the EACOP project
The East
African Crude Oil project is seeking a 1.8-billion-dollar debt for construction
to take off. The project has been estimated to cost between $3.5 billion and $4
billion, of which 60 percent comprises debt raising and 40 percent equity.
Energy and Minerals Development Minister, Ruth Nankabirwa on Friday said the
project is likely to kick off as a significant part of the needed financing
raised through debt financing.
Nankabirwa told journalists that so far, 30 percent of the 40 percent of debt
has so been raised as the hunt for more financing continues. She said part of
the debt is expected from the Export-Import Bank of China.
A number of anti-fossil fuel campaigners have been courting Bank against
financing the pipeline needed to transport oil from the oilfields in the
Albertine to the port of Tanga in Tanzania to world markets.
While some banks have indicated that they will not fund the project, Nankabirwa
confirmed that some within Africa are likely to lend EACOP.
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Sources at the Ministry told URN that there is an ongoing effort to ensure that
the remaining money is raised before the end of 2o23 so that construction
commences by the beginning of 2024.
Nankabirwa confirmed that the Ministry of Finance is honoring Uganda National
Oil Company’s equity payments to EACOP. Equity to the project is estimated at
$2.4 Billion.
The shareholders in EACOP are affiliates of the three Upstream joint venture
partners (the Uganda National Oil Company, TotalEnergies E&P Uganda, and CNOOC
Uganda. Others include Tanzania Petroleum Development Corporation.
Shareholdings are TotalEnergies 62%, UNOC and TPDC 15% each, and CNOOC 8%.
Financing projects like EACOP has been part of the discussion as some of the
Western-based banks and insurers opt to fund cleaner energy projects and the
so-called energy transition.
Some have
suggested that the government of Uganda and others should look for funding within their budgets to fund oil and gas developments.
Finance Minister, Matia Kasaija however told journalists that there is no cause
for alarm adding that Uganda will look for other partners to fund its oil and
gas development.
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The Managing Director of East African Crude Oil Pipeline (EACOP) Ltd, Matin
Tiffen on Friday told URN that preparation works on the EACOP were going on
within Uganda and Tanzania with about 6000 people and fifty companies actively
working on the project.
In a related development, URN has been reliably informed that Uganda is in
negotiations with DRC to join the EACOP. DRC’s Hydrocarbons Minister, Didier
Budimbu Ntubuanga has been in Uganda and held negotiations with Ruth Nankabirwa
and other government officers.
