East Africa pipeline faces headwinds

Climate activists are urging more banks and insurers not to back the controversial $5 billion East African crude oil pipeline that is meant to carry oil from Uganda’s Hoima oilfields to the Tanzanian coastal town of Tanga

MOMBASA, Kenya – Climate activists are urging more banks and insurers not to back the controversial $5 billion East African crude oil pipeline that is meant to transport oil from the Hoima oilfields in Uganda to the Tanzanian coastal town of Tanga. Influential climate activists Vanessa Nakate and Hilda Nakabuye have lent their support to opponents of the pipeline citing the need for Africa to stay away from fossil fuels.

Relentless pressure from environmental groups, under the #StopEACOP banner, has led to a growing list of banks and insurers abandoning the pipeline project. Just this week, the project suffered another major setback after insurer Allianz Group pulled out of the project. He joins 15 banks and seven insurance companies – including HSBC, BNP Paribas and Swiss Re – who have denied financial support for the pipeline in response to the campaign by numerous environmental organisations, led by the international group 350.org.

The 897-mile (1,443 km) pipeline is billed as the longest heated pipeline in the world. The China National Oil Corporation and French energy conglomerate TotalEnergies, alongside the Uganda National Oil Company and the Tanzania Petroleum Development Cooperation, have remained firm in pursuing the pipeline project which is expected to start transporting oil in 2025.

Johnson Nderi, a financial analyst in Nairobi, backs the pipeline, saying “Africa needs stable and cheap energy like that offered by oil and coal, to develop its manufacturing sector.”

Construction of the pipeline will displace thousands of families and threaten water resources in the Lake Victoria and Nile basins, according to 350.org. The environmental group goes on to say that the crude pipeline will generate some 37 million tonnes (34 million metric tons) of carbon dioxide emissions annually, fueling climate change.

“TotalEnergies puts profits before people and it shows. Communities in Uganda and Tanzania have fought tirelessly against the pipeline project and the trail of destruction it is already leaving behind,” said #StopEACOP Campaign Coordinator Omar Elmawi. “At a time when scientists are calling for the phasing out of fossil fuel projects, to avoid the worst impacts of climate change, it is ill-advised and irresponsible to go ahead with this project, while ignoring the cries most affected.”

TotalEnergies defended the pipeline noting that it adheres to strict Ugandan and Tanzanian environmental laws. An environmental and social impact assessment report by the Dutch Environmental Assessment Board has raised concerns about significant risks posed to wildlife, including chimpanzees in the Bugoma, Wambabya and Taala forest reserves.

Originally valued at $3.5 billion, the electrically heated underground pipeline will now cost $5 billion and is set to start near Lake Albert in Hoima district, western Uganda. It will bypass Lake Victoria and enter northern Tanzania towards the Chongoleani Peninsula in the Indian Ocean, carrying 216,000 barrels of crude oil per day.

The pipeline is expected to displace more than 14,000 households in Uganda and Tanzania, according to international charity Oxfam. But proponents of the project cite an annual revenue of $2 billion from oil exports alongside some 12,000 direct jobs for its advocacy.

Britain’s Tullow Oil first discovered oil in the Lake Albert Basin in 2006, with recoverable oil estimates pegged at 1.2 billion barrels. In 2020, Tullow sold its entire stake to Total Energies. In early February, the pipeline’s main backers, led by Total Energies, announced the conclusion of the financial investment decision, marking the start of pipeline construction.

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The Associated Press’s climate and environmental coverage receives support from several private foundations. Learn more about AP’s climate initiative here. The AP is solely responsible for all content.

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