East African Crude Oil Pipeline financiers warned

East African Crude Oil Pipeline talks in the offing
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Just days after the confirmation of the Construction of the East African Crude Oil Pipeline (EACOP) , the project is facing another challenge after a group of Non-Governmental Organisations (NGOs) issued a warning to potential financiers against funding the multi-billion project citing environmental and social risks.

More than 260 NGOs are seeking to persuade at least 25 banks listed as likely investors in the $3.5 billion project not to participate in the funding.

In an open letter to the banks, the NGO’s claimed the project would lead to serious environmental risks through carbon emissions. According to the letter, the transportation of oil will generate over 34 million tonnes of carbon emissions each year and the project will lead to the loss of community land and livelihoods.

The organisations from 49 countries, including 84 African-based organisations from the affected countries of Uganda, Kenya and DR Congo, detailed the risk factors involved in the proposed 1,445-kilometer crude oil pipeline project, including risks to water, biodiversity, natural habitats and financiers.

READ: Construction of East African Crude Oil Pipeline to begin in March

The letter states that the project does not stack up since the value of Uganda’s oil reserves has fallen by some 70% over the past five years as oil prices have fallen. It projects that the value will fall further in the global low-carbon transition and that the project risks driving Uganda and Tanzania deeper into unsustainable debt, all for oil revenues which will amount to “peanuts”.

French oil major Total, together with the governments of Uganda and Tanzania and Total’s project partner, the Chinese state-owned oil firm CNOOC, are pushing towards reaching the already much-delayed Final Investment Decision on the EACOP early this year.

The proposed 1,445-kilometer crude oil pipeline from Hoima in Uganda to the port of Tanga in Tanzania would, if completed, be the longest heated crude oil pipeline in the world.