Banks urged to avoid financing of oil pipelines in East Africa

NAIROBI, March 1 (Thomson Reuters Foundation) – More than 260 charities on Monday urged banks not to finance a $ 3.5 billion oil pipeline in East Africa, fearing the project could lead to the loss of land and community livelihoods, environmental destruction and increased carbon emissions.

French company Total and China National Offshore Oil Corporation are expected to begin work soon on a 1,445 km (900 mile) pipeline between western Uganda and neighboring Tanzania to the port of Tanga in the Indian Ocean. .

About two-thirds of the cost of the pipeline will be financed by debt, and a Ugandan unit of the South African group Standard Bank, the Japanese company Sumitomo Mitsui Banking Corp and the Industrial and Commercial Bank of China are jointly considering raising the financing, said. charitable organizations.

An open letter signed by 263 charities – including the African Institute for Energy Governance, the Alliance for Food Sovereignty in Africa, Greenpeace and Friends of the Earth – urged banks not to grant loans for the program.

“In light of the climate change crisis, many countries are committed to cleaning up their energy systems by promoting renewable energies,” said Diana Nabiruma of the African Institute for Energy Governance, one of the signatories, in a press release.

“No responsible bank should finance the East African Pipeline Project (EACOP) knowing that the economic, environmental, climatic and social risks of the project are too immense.”

The letter also called on 23 other banks to exclude funding for the project.


Uganda is eager to accelerate the crude pumping plan, which President Yoweri Museveni hopes will help revive an economy hard hit by the coronavirus pandemic.

Landlocked Uganda discovered crude oil reserves about 14 years ago, but commercial production has been delayed in part due to a lack of infrastructure, such as an export pipeline.

International and local environmental groups have expressed fears about the risks posed by the pipeline, but last December Uganda’s National Environmental Management Authority (NEMA) issued a certificate of approval for a report of environmental and social impact assessment submitted by Total.

As Tanzania had already given its approval, the Ugandan stamp meant that the project had environmental impact certification along its entire length.

But charities said on Monday that around 14,000 families risked losing their land if the pipeline goes ahead, as it could pass through more than 400 villages in Uganda and Tanzania.

Almost a third of the pipeline will cross the basin of Africa’s largest lake, Lake Victoria, on which more than 40 million people from countries such as Kenya, Uganda, Tanzania and Burundi depend for their production of water. ‘water and food.

It will also cross 200 rivers, thousands of farms and vital wildlife reserves, and will also fuel climate change by carrying oil that will generate more than 34 million tonnes of carbon emissions each year, according to the letter.

Standard Bank said in an emailed statement to the Thomson Reuters Foundation that it had engaged an independent environmental and social adviser to visit the project and produce a due diligence report.

The bank was already reviewing a preliminary report.

“We support responsible investing by assessing and managing our environmental, social and governance (ESG) risks,” the bank said.

“Standard Bank’s new fossil fuel financing policy sets strict conditions for lending to fossil fuel projects. Among other conditions, project leaders must commit to minimizing or reducing greenhouse gas emissions.

Representatives of Sumitomo Mitsui Banking Corp could not be contacted immediately by the Thomson Reuters Foundation, and the Industrial and Commercial Bank of China did not respond to requests for comment.

China National Offshore Oil Corporation and Total did not immediately respond to a request for comment, but the French company said the pipeline was designed “with primary concern to minimize and mitigate impacts on local communities.”

He said adequate compensation, housing and livelihood programs would be provided to affected households. (Reporting by Nita Bhalla @nitabhalla; Editing by Helen Popper. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, which covers the lives of people around the world who struggle to live freely or fairly.

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