CAPE TOWN (Reuters) – The company developing Uganda’s EACOP crude pipeline has closed the first allocation of external financing from a syndicate of institutions including commercial banks and Afreximbank, a statement from EACOP Ltd said on Wednesday.
Among the financiers are Standard Bank, Stanbic Bank Uganda, KCB Bank Uganda and Saudi Arabia’s Islamic Corporation for the Development of the Private Sector.
“The successful closing of this first tranche represents a significant milestone,” the statement said. It did not provide a value for the financial backing.
In October, Uganda’s energy minister told Reuters that partners developing the $5 billion East African Crude Oil Pipeline (EACOP) were injecting more cash into the project to prevent it stalling as debt financing proved elusive.
Minister Ruth Nankabirwa had travelled to Beijing to meet with potential Chinese funders, seen as crucial for the success of EACOP after several Western banks, including BNP Paribas, Société Generale and Barclays, pledged not to finance the pipeline under pressure from climate activists.
Linking oilfields in Uganda to Tanga port in Tanzania, EACOP is part of a broader $15 billion energy plan by TotalEnergies, China’s CNOOC and other partners to develop the Kingfisher and Tilenga discoveries close to Lake Albert.
A source briefed on the financing arrangement told Reuters on Wednesday that financiers are committed to fund the entire $5 billion project, with Chinese backing also secured.
“Oil companies that are already involved will take both equity and debt. The Chinese are in,” the source said.
(Reporting by Wendell Roelf; Editing by Kirsten Donovan)
