EACOP, the company in charge of the construction and future operation of the East African Crude Oil Pipeline project from Kabaale in Uganda to Tanga in Tanzania, has got a massive financial boost from several top African banks. In a statement, EACOP said the injection of cash “also demonstrates the support of financial institutions on this transformative regional infrastructure.”

The East African Crude Oil Pipeline Ltd today announced that it has closed the first tranche of external financing for the project, provided by a syndicate of financial institutions including regional banks such as African Export Import Bank (Afreximbank), The Standard Bank of South Africa Limited, Stanbic Bank Uganda Limited, KCB Bank Uganda and The Islamic Corporation for the Development of the Private Sector (ICD).

“The successful closing of this first tranche of external financing represents a significant milestone for EACOP and its shareholders TotalEnergies (62%), Uganda National Oil Company Limited (UNOC – 15%), Tanzania Petroleum Development Corporation (TPDC – 15%) and CNOOC (8%),” EACOP stated.

Tranches are segments or slices of a pooled collection of financial instruments, such as loans or mortgages, that are structured to divide risk or investment return among different investors.

The statement was however silent about how much the banks have put on table. The Ministry of Energy and the construction of the pipeline is expect to cost about $4 billion or close to 15 trillion shillings.

The shareholders in EACOP are affiliates of the three Upstream joint venture partners (the Uganda National Oil Company, TotalEnergies E&P Uganda and CNOOC Uganda) together with the Tanzania Petroleum Development Corporation.Shareholdings are TotalEnergies 62%, UNOC and TPDC 15% each and CNOOC 8%.

EACOP is being constructed in parallel with two upstream development projects ofTilenga under TotalEnergies and Kingfisher under CNOOC.

The Energy and Mineral Development Minister, Ruth Nankabrwa last year told journalists the project will be financed though equity to debt ratio of 40:60.She was later quoted saying the the arrangement had been revised to 52:48.

At the time, Nankabirwa said the government was looking looking for$1.2 billion in debt for the EACOP.

In Uganda and Tanzania, the construction of the EACOP pipeline is progressing well with a continued focus on safety, environmental sustainability, and local community engagement. The overall project progress exceeded 50% end 2024. More than 8,000 Ugandan and Tanzanian citizens are employed on the project, about 400,000 manhours of training have been provided so far and 500 M$ spent
locally on goods and services.

The East African Crude Oil Pipeline is a crude oil export infrastructure that will transport Uganda’s crude oil from Kabaale – Hoima in Uganda to the Chongoleani peninsula near Tanga in Tanzania for export to the international market.

Upon completion, it will have the capacity to transport 246,000 barrels of crude oil per day. This major export system includes 1,443 km (296 km in Uganda and 1,147 km in Tanzania) of insulated and buried 24-inch pipeline, 6 pumping stations, two pressure reduction stations and a marine export terminal in Tanzania (with a 3 MWp solar plant), all along connected to national primarily hydro- based grids for power supply.

“The project is committed to the highest Environment and Social standards such as those of the International Finance Corporation and the Equator Principles,” an official said.