EACOP secures funding as Uganda eyes oil production next year
The EACOP project, estimated to cost around $5 billion, is financed through a combination of debt and equity
What you need to know:
- For years, the financing of the pipeline proved either difficult or elusive due to widespread environmental and social concerns, with many banks and insurers refusing to support the project, citing risks to ecosystems, communities, and climate goals.
A financing deal for the East African Crude Oil Pipeline Project (EACOP) has finally been inked, paving way for unhindered construction of a pipeline that will transport oil produced from Uganda’s Lake Albert oilfields to the port of Tanga in Tanzania where the resource will be sold to other interested global markets.
The EACOP project, estimated to cost around $5 billion, is financed through a combination of debt and equity, with the project owners, namely TotalEnergies, CNOOC, UNOC, and TPDC, contributing about $2 billion in equity and raising another $2.4 billion - $3 billion in external debt.
For years, the financing of the pipeline proved either difficult or elusive due to widespread environmental and social concerns, with many banks and insurers refusing to support the project, citing risks to ecosystems, communities, and climate goals.
However, this evening Daily Monitor learnt that this hurdle has been overcome with inking of a financing deal for the mega regional project.
“EACOP Ltd., the company in charge of the construction and future operation of the East African Crude Oil Pipeline project from Kabaale in Uganda to Tanga in Tanzania, is pleased to announce that it has closed the first tranche of external financing for the project, provided by a syndicate of financial institutions including regional banks such as African Export Import Bank (Afreximbank), The Standard Bank of South Africa Limited, Stanbic Bank Uganda Limited, KCB Bank Uganda and The Islamic Corporation for the Development of the Private Sector (ICD),” reads a statement confirming Daily Monitor prior information regarding securing of the financing deal.
The statement shared with Daily Monitor by the Ministry of Energy, further reads: “The successful closing of this first tranche of external financing represents a significant milestone for EACOP and its shareholders TotalEnergies (62 per cent), Uganda National Oil Company Limited (UNOC - 15 per cent), Tanzania Petroleum Development Corporation (TPDC - 15 per cent) and CNOOC (8 per cent).
“It also demonstrates the support of financial institutions on this transformative regional infrastructure.”
According to the statement titled: EACOP Ltd announces the closing of the first financing tranche for the East African Crude Oil Pipeline Project, In Uganda and Tanzania, the construction of the EACOP pipeline is progressing well with a continued focus on safety, environmental sustainability, and local community engagement.
“The overall project progress exceeded 50 percent as of end 2024. More than 8,000 Ugandan and Tanzanian citizens are employed on the project, about 400,000 manhours of training have been provided so far and 500 million spent locally on goods and services,” reads the statement.
The East African Crude Oil Pipeline is a crude oil export infrastructure that will transport Uganda’s crude oil from Kabaale - Hoima in Uganda to the Chongoleani peninsula near Tanga in Tanzania for export to the international market.
Upon completion, it will have the capacity to transport 246,000 barrels of crude oil per day. This major export system includes 1,443 km (296 km in Uganda and 1,147 km in Tanzania) of insulated and buried 24-inch pipeline, 6 pumping stations, two pressure reduction stations and a marine export terminal in Tanzania (with a 3 MWp solar plant), all along connected to national primarily hydrobased grids for power supply.
The project is committed to the highest Environment and Social standards such as those of the International Finance Corporation and the Equator Principles.
When contacted, the Permanent Secretary in the Uganda Ministry of Energy and Mineral Development, Eng. Pauline Irene Batebe, said: “This largely means that development of the EACOP will progress unhindered alongside the Upstream development as we aim for commencement of oil production in 2026.”
