Why Chinese takeover of financing EACOP project will be a disaster for the region

May 22, 2023

Bwengye says there is no room for any local or international public support for any new oil and gas projects, or the expansion of coal, oil, and gas exploration, production, transportation, storage, refining, power generation, and associated infrastructure.

Why Chinese takeover of financing EACOP project will be a disaster for the region

Rajab Yusuf Bwengye
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The curse of pain from Oil and gas pipelines looks likely to eventually befall the East African region. 

The Niger Delta located in the river state of Nigeria where the home of Ogoni communities presents the best vivid example of oil and gas disasters. 

Walk around Port Harcourt, the city only smells oil, walk around Ogoni land, the swamps, roads, lakes, rivers, and community gardens are all soaked and covered with dirty oil. It’s just not an environment fit for human living.

A fish farmer whose farm was destroyed after the 2008 oil spill. Photo credit: amnesty.org.uk

The East African Crude Oil Pipeline (EACOP) also known as the Uganda-Tanzania Crude Oil Pipeline (UTCOP) is a mega Oil project intended to transport crude oil from Uganda’s Oil fields located at the heart of the biodiverse Albertine rift to the port of Tanga, Tanzania on the Indian Ocean. Once completed, the pipeline will be the longest heated crude oil pipeline in the world covering 1443 kims. (296 kms in Uganda and 1147 kms in Tanzania) traversing ten (10) districts in Uganda (that is Kikuube, Hoima, Kakumiro, Kyankwazi, Mubende, Gomba, Sembabule, Lwengo, Rakai and Kyotera); involving twenty-five (25) sub-counties and one hundred seventy-one (171) villages; 

In Tanzania, it will traverse eight regions (Kagera, Geita, Shinyaga, Tabora, Singida, Dodoma, Manyara and Tanga) involving twenty (20) districts

The pipeline take-off is lagging behind compared to other middles stream oil infrastructure developments at Kingfisher and Tilenga which are equally very harmful given the fact that 95% of these oil and gas operations are located in protected areas of Kabwoha and Bugungu wildlife reserves and further north into Murchison falls punctuated with shared water bodies (Lake Albert) and international rivers government by detailed and complex international agreements (Nile).

The EACOP project from the start has been marred by many complexities ranging from compensation and resettlement challenges, anticipated environmental disasters, human rights abuses, and more importantly a financing dilemma.

However, after European and American banks opted out of the project’s financing, citing climate risk and human rights issues mainly Standard Chartered Bank that withdrew a $5 billion offer after a concern that the project could generate seven times more carbon emissions per year than the rest of the country, the Chinese seems to be taking up the upper hand.

French energy giant Total Energies has signed a deal with China Petroleum Pipeline Engineering (CPP) for the construction and supply of line pipe, a development that tilts the trans-border project to Beijing, where the biggest chunk of the loans is expected to come from.

The Chinese are already in advanced developments at the Kingfisher oil field and once this EACOP dream comes true. However, whereas this would look like a financing breakthrough for the investors and host East African governments, the EACOP will steer Trans boundary conflicts especially once shared bodies such as Lake Victoria are polluted. 

The project just like the Kingfisher and the Tilenga will further never maximize the employment of the host communities given the fact that it’s a high-technique investment that by far does not suit the lifestyle of the communities. Available evidence indicates that the oil, gas and mining sectors only employ about 1% of Africa’s labour force. Meanwhile, the continued investment in oil and gas stands to result in job losses in the agriculture, fishing, clean energy, tourism and other sectors. 

Thus oil and gas exploitation by any stands will never match with agriculture employs 60-70% of Africa’s labour force according to ILO.

The Albertine Oil host communities where the pipeline will begin already face land eviction issues mainly the Oil refinery and Central Processing Facility (CPF) communities of Gwedo, Kasenyi and Kabaale, issues of water pollution by ecological footprints brought about by the CPF current developments, Oil roads traversing protected areas and other key ecosystem resources such as forests, food insecurity and displacements in the face of evictions, the challenge of cut off dates that deny the locals the right to fully utilize their land, restricted access to lake and park resources, human-wildlife conflicts that have come as a result of tampering with animal habitats and altering their migration routes and breeding sites, tribal conflicts with many tribes flocking into the region to take up any available opportunity, accelerated cases of Gender Based violence among many others. 

In this era of worsening climate change, The EACOP project like other dirty energy fossils comes along with threats to Key ecosystem resources along its right of way affecting Open plateaus and wetlands in Gomba and Sembabule districts, river Wambabya in Hoima, Bugoma forest in Hoima, Taala forest in Kyankwanzi, Kasana Kasambya forest in Mubende, Katonga river between and Gomba districts, Nabakazi river between Mubende and Gomba districts, Kafu river between Hoima and Kakumiro districts, Kibale and Jemakunya rivers among others and for approximately 90 kilometres, the right of way corridor crosses a substantial zone of wetlands as it approaches the border of Tanzania through the north-western corner of Lake Victoria. 

Thus, for Uganda and its partners to suit the parameters of the 2015 Paris Accord for combating climate change for which Uganda and other countries both in the global south and north are signatories, a phase-out of oil, gas and coal, the source of 86% of greenhouse gas emissions in the last 10 years, is paramount if the world is to achieve the net zero emissions target by 2050.

Moreover, the IPCC’s latest climate mitigation report shows that existing fossil fuel infrastructure, if operated as planned, would already push the world far beyond 1.5°C. 

This means that some of the oil and gas fields and coal mines, as well as fossil fuel-burning power plants, that are already built and in production will need to be decommissioned and retired early to keep the 1.5°C warming target of the Paris Agreement within reach, which includes 40% of already-developed fossil fuel reserves that will need to stay in the ground. 

Therefore, there is no room for any local or international public support for any new oil and gas projects, or the expansion of coal, oil, and gas exploration, production, transportation, storage, refining, power generation, and associated infrastructure. 

Chocking the African continent with dirty energy fossils is one of the primary obstacles to progress toward the local, community-driven, sustainable energy solutions needed for much of the Global South and we must thus stand firm for the African cause and resist intimidation by the world’s powerful corporate powers as the only way to avoid the corporate capture, environmental disaster and human race extinction.

The writer works as the Oil governance manager at NAPE-FOE-Uganda

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