EACOP Ltd., the company responsible for the construction and future operation of the East African Crude Oil Pipeline (EACOP), has successfully closed the first tranche of external financing.

With an estimated total cost of $5Billion, the 1,443 kilometre facility from Kabaale in Uganda to Tanga in Tanzania, was initially funded through equity contributions from its shareholders following the Final Investment Decision (FID) in February 2022. These contributions, made by TOTALEnergies (62%), the Uganda National Oil Company Limited (UNOC – 15%), the Tanzania Petroleum Development Corporation (TPDC – 15%), and CNOOC (8%), enabled significant progress in the early stages of construction, EACOP says in a statement. By the end of 2024, the project had surpassed 50% completion, with major milestones achieved in pipe haulage, infrastructure development, and workforce training.

The first tranche of external debt financing is provided by a syndicate of financial institutions, led by the continent’s homegrown lenders, including regional banks such as the African Export-Import Bank (Afreximbank), The Standard Bank of South Africa Limited, Stanbic Bank Uganda Limited and KCB Bank Uganda,. The syndicate also includes the Islamic Corporation for the Development of the Private Sector (ICD), a Saudi owned financier based in Jeddah.

The new money will now fund the remaining phases of construction and operational setup.

Over 8,000 Ugandan and Tanzanian citizens are currently employed on the project, with approximately 400,000 man-hours of training provided to date, according to EACOP. “Over $500Million has been spent locally on goods and services, further contributing to the region’s economic development”, the project’s spokespersons allow.

EACOP, designed to transport Uganda’s crude oil from Kabaale in Hoima, Uganda, to the Chongoleani peninsula near Tanga, Tanzania, for export to international markets, will have a capacity of 246,000 barrels of crude oil per day. 296 kilometres of the pipeline will be in Uganda while 1,147 kilometres run through Tanzania.

The project includes six pumping stations, two pressure reduction stations, and a marine export terminal in Tanzania, which will feature a 3 MWp solar plant. The pipeline will be insulated and buried, with power supplied primarily by hydro-based national grids.

The project is committed to the highest Environment and Social standards such as those of the International Finance Corporation and the Equator Principles, the EACOP’s publicists claim.