Environmentalists turn heat on local banks over EACOP funding
What you need to know:
On March 27, the EACOP holding company, responsible for constructing the pipeline, announced the completion of the first round of debt financing with a consortium of five African and Middle Eastern banks, signaling a slow return of investor confidence in the Uganda-Tanzania pipeline project
At least nine youthful environmental activists were arrested by police on April 2 as they marched to the headquarters of Stanbic Bank at Crested Towers in Kampala. The arrest was made with the assistance of the Special Forces Command (SFC), the security body responsible for protecting the president.
The suspects, part of the over 50 members of the Students Against Eacop Uganda, intended to present a petition to the bank’s Chief Executive Officer Mumba Kalifungwa in which they protested its funding commitment towards the ongoing construction of the East African Crude Oil Pipeline (EACOP) project.
Kampala Metropolitan Police spokesperson Patrick Onyango confirmed the arrests, stating, “We have nine suspects in our custody. We shall charge them with common nuisance and present them to court either today or tomorrow morning.”
Stanbic Bank is one of the financial institutions that has committed to funding the 1,443 km heated pipeline, which will transport Uganda’s wax crude oil from Uganda to Tanzania for exportation.
On March 27, the EACOP holding company, responsible for constructing the pipeline, announced the completion of the first round of debt financing with a consortium of five African and Middle Eastern banks, signaling a slow return of investor confidence in the Uganda-Tanzania pipeline project. However, the project has faced significant opposition from environmentalists.
The financing group includes South Africa’s Standard Bank, its Ugandan subsidiary Stanbic Bank, Egypt’s African Export–Import Bank (Afreximbank), and KCB Bank Uganda Ltd, a subsidiary of Kenya Commercial Bank (KCB) Group.
In their petition, which was seen by this website, the environmentalists reminded Kalifungwa that the project the bank plans to finance has already been rejected by 43 banks and 29 insurers worldwide due to its disastrous potential impacts. The petition also pointed out that the project has caused the displacement of over 10,000 families and the arrest of over 100 activists, with ongoing abductions.
“At a time when the world is grappling with the escalating effects of climate change, financing a massive fossil fuel infrastructure project is not only irresponsible; it is an active assault on our planet and our people. EACOP will intensify the climate crisis, exacerbating droughts, floods, and extreme weather events that disproportionately affect African communities, who have contributed the least to the climate crisis but bear its severe consequences,” reads part of the petition.
It continues, “We have consistently highlighted the potential hazards of the controversial EACOP, including severe impacts on wildlife habitats, community displacement, and intensified climate change due to increased greenhouse gas emissions.”
Yudah Kaye, the Chief Mobilizer of Students Against EACOP Uganda, who presented the petition to the bank, said, “We want the bank to inform Ugandans if this is part of their Corporate Social Responsibility. They are using our hard-earned money to fund a project that harms our environment and has caused suffering to thousands of families.”
Stanbic Bank Responds
In response to the activists’ concerns, Kenneth Agutamba, the Stanbic Bank Country Manager for Corporate Communications, confirmed that the bank is participating in financing the EACOP project, which they argue aligns with their commitment to a just transition that balances environmental sustainability and economic development.
“Stanbic Bank confirms its participation as one of the lenders for the East African Crude Oil Pipeline (EACOP) project after completing its governance processes. Standard Bank is providing financing through both The Standard Bank of South Africa Limited and Stanbic Bank Uganda Limited. Standard Bank’s decision to participate in this transformative project for Uganda and Tanzania’s economies aligns with its commitment to a Just Transition that balances environmental sustainability with economic development,” he said.
He added, “The bank is satisfied that the project meets the criteria required under the Equator Principles (a set of standards for managing environmental and social risks in project finance) and its Climate Policy.”
The $5 billion (Shs18 trillion) EACOP project will transport Uganda’s waxy crude oil from the oil fields in mid-western Uganda to the port of Tanga on the Indian Ocean in Tanzania. The project is jointly owned by French oil giant TotalEnergies (62 percent), Uganda National Oil Company (UNOC – 15 percent), China National Offshore Oil Corporation (CNOOC – 8 percent), and Tanzania’s Petroleum Development Corporation (TPDC – 15 percent), under EACOP Ltd.