The East African Crude Oil project is seeking a 1.8-billion-dollar debt for construction to take off. The project has been estimated to cost between $3.5 billion and $4 billion, of which 60 percent comprises debt raising and 40 percent equity.
Energy and Minerals Development Minister, Ruth Nankabirwa on Friday said the project is likely to kick off as a significant part of the needed financing raised through debt financing.
Nankabirwa told journalists that so far, 30 percent of the 40 percent of debt has so been raised as the hunt for more financing continues.
She said part of the debt is expected from the Export-Import Bank of China.
A number of anti-fossil fuel campaigners have been courting Bank against financing the pipeline needed to transport oil from the oilfields in the Albertine to the port of Tanga in Tanzania to world markets.
While some banks have indicated that they will not fund the project, Nankabirwa confirmed that some within Africa are likely to lend EACOP.
Sources at the Ministry told this investigative news website that there is an ongoing effort to ensure that the remaining money is raised before the end of 2o23 so that construction commences by the beginning of 2024.
Nankabirwa confirmed that the Ministry of Finance is honoring Uganda National Oil Company’s equity payments to EACOP. Equity to the project is estimated at $2.4 Billion.
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.
Others include Tanzania Petroleum Development Corporation. Shareholdings are TotalEnergies 62%, UNOC and TPDC 15% each, and CNOOC 8%.
Financing projects like EACOP has been part of the discussion as some of the Western-based banks and insurers opt to fund cleaner energy projects and the so-called energy transition.
Some have suggested that the government of Uganda and others should look for funding within their budgets to fund oil and gas developments.
Finance Minister, Matia Kasaija however told journalists that there is no cause for alarm adding that Uganda will look for other partners to fund its oil and gas development.
The Managing Director of East African Crude Oil Pipeline (EACOP) Ltd, Matin Tiffen said that preparation works on the EACOP were going on within Uganda and Tanzania with about 6000 people and fifty companies actively working on the project.
In a related development, URN has been reliably informed that Uganda is in negotiations with DRC to join the EACOP.
DRC’s Hydrocarbons Minister, Didier Budimbu Ntubuanga has been in Uganda and held negotiations with Ruth Nankabirwa and other government officers.