Standard Bank to fund $5bn Uganda-Tanzania oil pipeline
TLDR
- South Africa’s Standard Bank funds controversial Uganda-Tanzania oil pipeline project, transporting oil from Uganda's Lake Albert fields to Tanzanian port of Tanga.
- French oil major TotalEnergies has majority stake, with Uganda, Tanzania, and China National Offshore Oil Corporation as minority shareholders.
- Project faces funding challenges due to environmental concerns, resulting in delays for Uganda’s oil export ambitions.
South Africa’s Standard Bank, the largest African lender by assets, will fund the controversial Uganda-Tanzania oil pipeline project. The 1,445 km pipeline aims to transport oil from Uganda's Lake Albert oil fields to the Tanzanian port of Tanga.
French oil major TotalEnergies holds a majority stake in the project, with Uganda, Tanzania, and the China National Offshore Oil Corporation (CNOOC) holding minority shares. The project has faced significant funding challenges due to environmental concerns, with activists highlighting the displacement of thousands of people and damage to wildlife habitats.
This has led to hesitancy from potential lenders and insurance firms. The pressure from environmental activists has delayed Uganda’s oil export ambitions for four years, with even initially supportive Chinese lenders now expressing concerns over the project's economic viability.
Points clés à retenir
Uganda, a landlocked country that discovered oil 17 years ago, has faced delays in commercial production due to the absence of an export pipeline to the Indian Ocean. In collaboration with Tanzania, Uganda aims to complete the pipeline project by December 2025. However, the project has encountered hurdles, including a resolution passed by the European Parliament in 2022 opposing it. This has complicated efforts by French oil major TotalEnergies to secure capital from European lenders. Earlier this year, more than 20 insurers, including SA Meacock, SiriusPoint, Enstar Group, Blenheim, and Riverstone International, declined to insure the project amid pressure from activists concerned about environmental and social impacts.
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