Uganda, Tanzania Secure Financing For Crude Oil Pipeline

The Ugandan and Tanzanian governments have secured some of the money need for construction of the East African Crude Oi Pipeline EACOP. 

ECAOP Limited, the company in charged with the construction of the pipeline and its future construction confirmed that the money will be provided by a syndicate of banks. 

According to a statement issued on Thursday, the financial institutions include, KCB Bank Uganda, The Islamic Corporation for Development of Private Sector (ICD Development Bank, African Export Import Bank (Afreximbank) and The Standard Bank of South Africa.,the parent company of Stanbic bank Uganda

EACOP Limited said the successful closure of the first tranche of external financing represents what it described as significant milestone for EACOP and its shareholders.

The statement was however silent about how much the banks have put on table. The Ministry of Energy and the construction of the pipeline is expect to cost about $4 billion or close to 15 trillion shillings. 

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) together with the Tanzania Petroleum Development Corporation.   Shareholdings are TotalEnergies 62%, UNOC and TPDC 15% each and CNOOC 8%.

EACOP is being constructed in parallel with two upstream development projects of  Tilenga under TotalEnergies and Kingfisher under CNOOC.

The Energy and Mineral Development Minister, Ruth Nankabrwa last year told journalists the project will be financed though equity to debt ratio of 40:60.She was later quoted saying the the arrangement had been revised to 52:48.

At the time, Nankabirwa said the government was looking looking for  $1.2 billion in debt for the EACOP.