This archive report was first published on 3 May 2021.
Published on May 3, 2021, the East African Crude Oil Pipeline project, sponsored by Total SE, is facing significant financial challenges. The $3.5 billion project, which aims to transport 230,000 barrels of oil per day from Hoima in western Uganda to Tanga port in Tanzania, has seen several European lenders pull out, citing environmental concerns.
French banks BNP Paribas, Société Générale, and Crédit Agricole have opted not to provide financing for the project, according to a report by Les Echos. Milan-based UniCredit has also confirmed that its policies bar it from financing projects that pose environmental risks.
UniCredit's global head of media coverage, Tuulike Tuulas, stated, 'We confirm that UniCredit has stringent policies in place to prevent the bank from financing deals that present environmental risks and are in any way in violation of human rights.'
Other lenders, including Morgan Stanley and Credit Suisse, have also declined to comment on their involvement in the project. Standard Bank and its Uganda affiliate Stanbic are serving as financial advisers for Eacop, which is expected to raise $2.5 billion in debt financing.
The project's shareholders, including Total (62%), Uganda and Tanzania (15% each), and China National Offshore Oil Corporation (8%), are yet to find $130 million to pay for their equity in Eacop.
Stanbic chief executive Anne Juuko stated, 'It's early days; we haven't reached the financing stage. People are just getting ahead of themselves with talk of which bank is in or has pulled out.'
Standard Bank Group has stated that it will not compromise on the environmental, social, and governance standards that Eacop is expected to follow.
