By Isaac Wandubile
The East African Crude Oil Pipeline (EACOP) has said it is closing in on securing funds that will be spent in the construction of the oil pipeline. The line is expected to be 1,443 kilometers and EACOP on Tuesday said the race to source for the 3.5 billion dollars for the investment will close before the end of 2023.
Addressing the media at a meeting convened by Uganda Investment Authority, John-Bosco Habumugisha, the EACOP deputy managing director said government had as of Tuesday made commendable strides in its efforts to source for 60 percent of the money that is required in the financing of the scheme.
The cost of the investment is estimated at $3.5 and $4 billion. Approximately to $2.4 billion (about Ush9 trillion) will be secured as debt, while $1.6 billion (Ush6 trillion) will be equity financed by shareholders.
Those listed as shareholders include Uganda National Oil Company at 15 percent, Total Energies (62 percent), Tanzania Petroleum Development Corporation (15 percent), and China National Offshore Oil Corporation at 8 percent. Habumugisha was speaking when he led an EACOP team to receive an investment license for the project.
The license presented by Robert Mukiza, the UIA director general, has conditions including maintaining proper financial and accounting records, ensuring a gender-sensitive working environment, respect of conditions in the approved Environmental and Social Impact Assessment certificates and respect as well as protection of human rights.
“The investment license speaks to the investors we are looking for at a global level for the financing of the project,” Habumugisha said. Six months ago, Saudi’s Islamic Development Bank declared financing of $100 million (approximately Shs377 billion), which was part of the Islamic tranche for energy projects.
The project’s funding has faced problems with disapproval from some non- governmental organizations including civil suits, which have advocated for a cut back on its financing over climate concerns.
The civil organizations under #StopEACOP Movement, which is composed of local and European climate justice activists have previously demanded that international financiers publicly pledge not to provide the 60 percent debt financing towards the oil pipeline.
UIA Board member Angelo Izama said successful sourcing of the money will lead to the completion of the project that is expected to open more opportunities when the project succeeds. (For comments on this story, get back to us on 0705579994 [whatsapp line], 0779411734 & 0200900416 or email us at mulengeranews@gmail.com).
