Shareholders of the East African Crude Oil Pipeline (Eacop) have begun the search for financiers of the project, whose completion is expected mid this year.
The 1,443km pipeline from Hoima in Uganda to the Indian Ocean port of Tanga in Tanzania, will cost $5 billion – a jump from the original cost of $3.5 billion due to the increase in prices of key inputs such as steel, cost of shipping as well as the cost of loans.
According to Proscovia Nabbanja, the Chief Executive Officer of Uganda National Oil Company (Unoc), the shareholders are expecting financing offers from a number of Export Credit Agencies (ECAs) from Europe and China.
As the East African reports, it is not clear at this stage if the ECAs will offer direct lending or act as intermediaries for the loans, but industry sources indicate that once European, American and Australian banks walked away from Eacop, China was “the only realistic option”.
Eacop is to be financed 60-40 percent split between debt and equity; this means its shareholders will raise $2 billion between them while the remainder is raised through loans from banks and other international lenders.
Eacop shareholders are TotalEnergies (62%), Unoc (15%), Tanzania Petroleum Development Company (15%) and China National Offshore Oil Corporation or Cnooc (8%).
The 1,445-kilometre heated pipeline starts in Hoima in the Albertine Graben, western Uganda, and ends at Tanga Port in Tanzania. At peak production, it will transport 216,000 barrels of crude oil daily. Because of Uganda’s oil’s waxy nature, it will be one of the longest heated crude oil export pipelines in the world. Tanzania will earn $12.7 off each barrel of oil transported through it.
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