$5bn Uganda–Tanzania crude oil pipeline (EACOP) project now 60% finished

The $5bn East African Crude Oil Pipeline (EACOP), a controversial flagship infrastructure project stretching 1,443 kilometres from Hoima, Uganda to Tanga port in Tanzania, is 60% completed, The Citizen reports.

The progress update – a major milestone for what is set to become the world’s longest heated crude oil pipeline – was made public on June 2 during an official inspection by the board of Tanzania’s Energy and Water Utilities Regulatory Authority (Ewura), who visited key construction sites in the Tanga region.

EACOP is owned by TotalEnergies E&P Uganda (62%), Uganda National Oil Company (15%), Tanzania Petroleum Development Corporation (15%), and China’s CNOOC Uganda (8%). More than 8,000 Ugandan and Tanzanian workers are employed on the project, with more than 400,000 man-hours of training provided and $500mn spent locally on goods and services.

The project is expected to reshape the region’s energy sector by unlocking Uganda’s estimated 6.5bn barrels of crude oil reserves. Tanzania hosts the majority of EACOP, the construction of which various groups have filed lawsuits against over environmental concerns and its impact on local communities.

In March, EACOP Ltd. secured the first tranche of external financing for the pipeline, with funding from a syndicate of financial institutions, including Afreximbank, Standard Bank of South Africa, Stanbic Bank Uganda, KCB Bank Uganda, and the Islamic Corporation for the Development of the Private Sector (ICD).

The project is financed on a 60:40 debt-equity ratio. Securing debt financing proved challenging, with six major Western banks, including BNP Paribas and Barclays, withdrawing amid environmental concerns.