Uganda will be able to get the money it needs to construct a planned US$3.5-billion Uganda–Tanzania Crude Oil Pipeline (UTCOP) also known as the East African Crude Oil Pipeline (EACOP), with funders ready to commit the money as soon as a final investment decision is made, according to Stanbic Bank Uganda.
The project has attracted “a lot of interest” and raising capital “is not a problem,” Stanbic CEO Patrick Mweheire said Tuesday in Kampala.
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The 1,445km export pipeline, which is crucial to plans by Total, Cnooc and Tullow Oil to tap the country’s first oil, has faced opposition from lobby groups who have voiced concern over its potential environmental impact as it is planned to run from Lake Albert-Kabaale in Uganda to Tanga port in Tanzania .
Uganda, with discoveries of six-billion barrels of oil resources, is targeting the start of production in 2022-23, while the 216 000 bbl/d pipeline would begin operations the following year. The government has said that a final investment decision (FID) to develop the finds and build the pipe could unlock as much as US$20-billion of investment.
Standard Bank Group said in June it was reviewing a request by environmental lobbyists to halt funding the proposed pipeline. The lives of as many as 14, 500 people or 400 households along its route could be affected, according to the request, which was signed by organizations including UK-based Global Witness.
Stanbic and Japan’s Sumitomo Mitsui Banking are the lead arrangers for financing of the 900-mile conduit, seeking to raise $2.5-billion in debt funding. Total, Cnooc and Tullow will also provide funds, as will the government.
“There are a lot of people sitting on the sidelines; funding for the pipeline can be raised,” Mweheire said. “We are all working collectively for FID.”
An investment decision on the pipeline, which would run from Hoima in Uganda’s oil region to the Tanzanian port of Tanga, is targeted later this year.