The Standard Bank of South Africa may decline to raise funds for the construction of the East African Crude Oil Pipeline (EACOP) between Uganda and Tanzania. “We have hired an independent firm to help us assess the environmental and social impact of the Total gas pipeline project in East Africa, which environmental groups have opposed.” the South African bank said, before saying that it was the result of the environmental and social audit that would give it the way forward, whether or not to grant a loan to the EACOP project.
The Standard Bank of South Africa has indeed acknowledged receipt of the joint letter, sent on March 1.st, 2021 to the executives of 25 banks around the world by 263 non-governmental organizations (NGOs) from 49 countries. NGOs are trying to discourage potential investors from investing in the world’s longest heated pipeline project by listing the environmental dangers involved. The 1,443-kilometer pipeline (including 296 km in Uganda), which will transport crude oil from Lake Albert in western Uganda to the port of Tanga in eastern Tanzania, where the crude will then be exported to international markets, will cause huge environmental problems. and social damage, according to NGOs. “The extraction of crude oil from Lake Albert could cripple fishing. In addition, the risk of an oil spill in Lake Victoria would have dire consequences for the millions of people (in around eight countries) who depend on the two lakes and their watersheds for drinking water and food production ” . they argue.
The financial plan is almost finished
The collective of 263 protesting NGOs includes Friends of the Earth International, 350.org, Catholic Overseas Development Agency, Reclaim Finance, Sierra Club, Global Witness, the IUCN National Committee of the Netherlands, BankTrack, the African Institute for energy governance and inclusive development, among others. Their call comes as sources close to Eacop announce the financial closure of the project by the end of the month. Of the $ 3.5 billion needed to complete the project, the promoters, the French energy giant Total and its partner China National Offshore Oil Corporation, expect a loan of about $ 2.5 billion from banks.
The imminent launch of EACOP also led to the launch on February 2nd, the project to finance micro, small and medium-sized enterprises (MSMEs) located along the route of the gas pipeline. A $ 500,000 project, financed by a grant from the African Development Bank (AfDB). And yet in May 2020, the AfDB had expressed its disinterest in this fossil energy project. A position taken at the time, following the suspicions expressed by a hundred civil society organizations on alleged commitments on his part in favor of the project.