Kampala, Uganda | THE INDEPENDENT | Tanzania today signed an agreement to host the East African Crude Oil Pipeline with its lead investor Total.
The signing of the long-awaited Host Government Agreement(HGA) on Thursday was witnessed by President Yoweri Museveni and Samia Suluhu Hassan in Dar es Salaam.
The conclusion of the deal with the French energy giant Total paves the way for the construction of a 1,440-km crude oil pipeline from Uganda’s Albertine region to Tanzanian seaport city of Tanga.
Uganda National Oil Company (UNOC), also one of shareholders in the pipeline attended the signing of the Tanzania Host Government Agreement (HGA) for the East African Crude Oil Pipeline (EACOP).
The signing of the agreement in Tanzania ends close to four years of negotiation between Tanzania and Uganda from the time when Intergovernmental Agreement for the pipeline was signed.
Petroleum Authority’s Director Legal and Corporate Affairs, Ali Sekatawa while at URN for a courtesy visit said it was necessary that all pending legal issue to be concluded.
The HGA between investors and the government of Tanzania has been already discussed, agreed and initialed but they couldn’t be concluded following the sudden death of former President Joseph Pombe Magufuli.
Sources however indicated to Uganda Radio Network that the delay on the Tanzanian side was due to the fact that there were pending issues including Tanzania’s percentage stake in the pipeline through Tanzania Petroleum Development Corporation (TPDC).
The Tanzanian cabinet reportedly agreed to also take 15% of the shares in the East African Crude Oil Pipeline through TPDC.
Going by the cabinet decision, Tanzania will like Uganda hold a 15% stake in the project. As per the agreements signed in April in Entebbe, Uganda through the Uganda National Oil Company (UNOC) holds 15 percent, CNOOC Limited holds eight percent while Total as the main investor will hold 70% stake.
While the signing of the agreements is being concluded in Tanzania, a number of local and international civil society groups continue to push international banks against funding the crude oil pipeline project.
Standard Bank, through its Ugandan subsidiary Stanbic, and SMBC are mobilizing for over $2.5 billion funding to the project.
But the civil society players claim that the pipeline poses grave risks to protected environments, water sources and wetlands in both Uganda and Tanzania.
They allege that it t will cross the Lake Victoria basin, where an oil spill could prove disastrous for the millions of people that rely on the lake’s watershed for drinking water and food production.
But Ali Sekatawa says some of the elements in the petition signed by over 250 organizations is based on falsehoods.
Sekatawa explained that while routing the pipeline through Lake Victoria would have been shorter and cheaper, it was decided to take a longer route in Tanzania for environmental concerns.
Reports indicate that French President, Emmanuel Macron early this month wrote to President Museveni signaling his support to US$3.5bn East African Crude Oil Pipeline (EACOP) Macron allegedly said that the project will be a “major opportunity to intensify trade between our two countries and to further expand our co-operation”
His letter followed reports that the three largest French banks, BNP Paribas, Crédit Agricole and Société Générale will not provide finance for the proposed 1,445km heated oil pipeline running from Hoima, Uganda to the port of Tanga in Tanzania.