The Islamic Development Bank (IsDB) has stepped up to provide $100 million of financing for the East African Crude Oil Pipeline (EACOP).
The controversial link will run from the oilfields of Uganda’s Lake Albert to the Tanzanian port of Tanga, a distance of 1,443 km. EACOP will be the world’s longest heated pipeline in the world.
TotalEnergies is believed to be seeking around $3 billion of external financing to support the pipeline plan. Japan’s Sumitomo Mitsui Banking Corporation (SMBC), South Africa’s Standard Bank and China’s ICBC are acting as financial advisors.
IsDB announced the Ugandan financing under a broader $1.12 billion announcement. The bank said it would provide also 100mn euros ($101mn) for a power plant in Uzbekistan.
Both the Uzbekistan and Ugandan financings came under a public private partnership (PPP).
“The governments in these countries are using PPP financing as a mechanism to attract private sector investment and expertise to deliver improved public services and accelerate economic growth,” IsDB said.
EACOP, it said, would allow Uganda to “untap its oil reserves and export oil to international markets”.
A number of banks have said they would not finance EACOP.
The StopEACOP group has named Mizuho Financial Group and Mitsubishi UFJ Financial Group (MUFG) as potentially involved in the plan.
IsDB also said it would provide $295mn to upgrade roads in Uganda, under a sovereign financing project.
The Islamic bank has previously stumped up cash to support a study on the Nigeria-Morocco Gas Pipeline (NMGP) project.