Uganda’s Energy Minister Confirms China Banks to Finance $3b Debt for Eacop

Afaf Fahchouch
Afaf Fahchouch
2 Min Read
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Energy Minister Ruth Nankabirwa, has finally put an end to months of speculation by confirming that the China Export-Import Bank, along with other Chinese banks, will finance the $3 billion required for the East African Crude Oil Pipeline (Eacop). The financing for the pipeline, which will stretch across 1,443kms in 10 districts from Kabaale Industrial Park in Hoima District in Uganda to a marine storage terminal at the Port of Tanga in Tanzania, is syndicated, including other African and Islamic banks. The pipeline has a debt to equity ratio of 60 to 40 percent.

During the grant of petroleum exploration licenses of the Turaco oil block, Ms. Nankabirwa revealed that two companies from two African countries will offer the money, and part of the funding will come from the Exim Bank of China. Ms. Irene Batebe, the Energy Ministry Permanent Secretary, revealed that the pipeline will also receive funding from other African and Islamic banks.

Shareholders, including Total Energies (62%), Uganda National Oil Company (15%), Tanzania Petroleum Development Corporation (15%), and China National Offshore Oil Corporation (8%), will finance Shs7.45 trillion ($2 billion) in equity. So far, the pipeline has declared funding from Saudi’s Islamic Development Bank and Afrexim Bank, totaling Shs1.2 trillion ($300m).

Ms. Nankabirwa also took a swipe at those who oppose Eacop, saying that “those who are not with us shouldn’t develop bad blood.” The confirmation ends months of speculation about the oil pipeline financing arrangements, which the government had kept under lock and key.

Afaf Al Fahchouch

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