The company behind Uganda’s EACOP crude pipeline has secured its first tranche of external financing from a consortium of institutions, including commercial banks and Afreximbank, EACOP Ltd announced on Wednesday.
- EACOP secures first tranche of external financing from commercial banks and Afreximbank.
- The successful closing of the first tranche is a significant milestone for the project.
- Developers are injecting additional funds to keep the project on track amid difficulties in securing debt financing.
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 statement said. It did not provide a value for the financial backing.
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EACOP is a key component of a broader $15 billion energy initiative led by TotalEnergies, China’s CNOOC, and other partners to develop the Kingfisher and Tilenga oil discoveries near Lake Albert.
In October, Uganda’s Energy Minister stated that developers of the $5 billion East African Crude Oil Pipeline (EACOP) were injecting additional funds to keep the project on track amid difficulties in securing debt financing.
EACOP, designed to transport crude oil from Uganda’s Lake Albert reserves to Tanzania’s Tanga port, has faced strong opposition from environmentalists and international advocacy groups.
Critics argue that the project poses significant environmental risks and could lead to the displacement of local communities.
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Uganda turns to China
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 Minister of Energy and Mineral Development, Ruth Nankabirwa, travelled to Beijing to engage with potential Chinese financiers, who are considered crucial to the project’s success.
A source familiar with the financing arrangement confirmed that funding commitments are now secured for the full $5 billion, with substantial backing from Chinese institutions.
