MOMBASA, Kenya — Climate activists are urging more banks and insurers not to back the controversial $5 billion East African crude oil pipeline, the primary for oil transport from Uganda’s Hoima oil fields to the Tanzanian coastal city of Tanza . Influential climate activists Vanessa Nakate and Hilda Nakabuye have extended their support to opponents of the pipeline, citing the need for Africa to move away from fossil fuels.
Unbelievable pressure exerted by environmental groups under the #StopEACOP banner has led to a growing list of banks and insurance companies abandoning oil pipeline projects. The project suffered another major setback this week after insurer Allianz Group pulled out of the project. It joins 15 banks and seven insurers – including HSBC, BNP Paribas and Swiss Re – that have refused to financially support the pipeline in response to a campaign spearheaded by several environmental organizations led by international conglomerate 350.org. Have given.
The 897-mile (1,443-kilometre) oil pipeline is billed as the longest hot pipeline in the world. China National Oil Corporation and French energy conglomerate TotalEnergies, along with Uganda National Oil Company and Tanzania Petroleum Development Cooperation, have been determined to advance the pipeline project, which is expected to begin transporting oil in 2025.
“Africa needs cheap stationary power, carried by oil and coal, to grow its manufacturing sector,” says Johnson Nederi, a financial analyst in Nairobi who supports the oil pipeline.
According to 350.org, construction of the pipeline will displace thousands of families and threaten water resources in Lake Victoria and the Nile basins. The environmental group says the crude pipeline will generate 37 million tons (34 million metric tons) of carbon dioxide emissions annually, fueling climate change.
“TotalEnergies is throwing profits at people and it shows. Communities in Uganda and Tanzania are fighting relentlessly against the planned pipeline and the trail of destruction is already being left in its wake,” said Omar Elmawi, coordinator of the #StopEACOP campaign. “At a time when scientists call for a phasing out of fossil fuel projects to avoid the worst effects of climate change, ignoring the cries of those most affected, the project is not advised to go ahead. It’s rude and irresponsible.”
TotalEnergies has defended the pipeline noting that it strictly complies with the environmental laws of Uganda and Tanzania. An Environmental Social Impact Assessment report conducted by the Netherlands Commission for Environmental Assessment raised concerns about significant risks to wildlife, especially chimpanzees, in the Bugoma, Wambaya and Tala forest reserves.
Initially costing $3.5 billion, the underground electrically heated pipeline will now cost $5 billion and is expected to be commissioned near Lake Albert in Hoima District of western Uganda. It will travel around Lake Victoria, entering northern Tanzania and transporting 216,000 barrels of crude oil per day en route to the Chongoliani Peninsula in the Indian Ocean.
According to the international poverty charity Oxfam, more than 14,000 households are expected to be displaced in both Uganda and Tanzania. But proponents of the project are citing $2 billion in annual revenue from oil exports, as well as about 12,000 direct jobs, in its defense.
The British firm Tullow Oil first discovered oil in the Lake Albert Basin in 2006, with oil recovery estimated at 1.2 billion barrels. In 2020, Tullow sold its entire stake to Total Energy. In early February, major proponents of the oil pipeline, led by Total Energy, announced the conclusion of a financial investment decision, signaling the start of construction of the oil pipeline.