The East African Crude Oil Pipeline (EACOP), one of the continent’s most ambitious infrastructure projects, encountered a significant financing hurdle in October 2024, threatening the momentum it had built over the past few years. With construction already underway and major commitments made by governments and oil companies alike, the delay in securing key debt financing from major lenders has caused industry-wide reverberations.
More than just a pipeline, EACOP represents a vision of economic transformation for Uganda, Tanzania, and the broader East African region. Stretching 1,443 kilometers from Hoima in Uganda to the Tanzanian port of Tanga, the pipeline is designed to transport 216,000 barrels of crude oil per day, with the first oil expected by 2025.
However, the recent withdrawal or indecision by several key lenders—citing environmental, social, and reputational risks—has thrown the project’s timeline and structure into question. This article offers an in-depth analysis of the October 2024 financing crisis, its underlying causes, its implications for regional development, and how Medic Holdings Limited sees both challenges and opportunities within this unfolding situation.
Background: EACOP in Context
EACOP was envisioned as a vital component of Uganda’s oil production plans, connecting upstream fields in the Albertine Graben (Tilenga and Kingfisher projects) to international markets via the Indian Ocean.
Key Players
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TotalEnergies – Majority shareholder (62%)
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CNOOC – Chinese energy company (8%)
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UNOC – Uganda National Oil Company (15%)
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TPDC – Tanzania Petroleum Development Corporation (15%)
Project Timeline
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2016–2020: Planning, feasibility studies, land acquisition
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2021: EACOP Bill passed in Uganda to provide a legal framework
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2022: Final Investment Decision (FID) signed, unlocking $10 billion in investments
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2023–2024: Construction begins; major contracts awarded
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2025: Expected date for first oil export via Tanga
With substantial progress made on land acquisition, environmental impact assessments, and preliminary construction, the pipeline’s financing was expected to be finalized by Q4 2024—until unexpected setbacks occurred.
October 2024: Financing Hits a Wall
In October 2024, news broke that multiple international lenders and insurers had either delayed or declined participation in EACOP’s project financing. These institutions included:
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Standard Chartered – Previously a lead advisor, now reportedly withdrawn
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JP Morgan Chase, Barclays, and Credit Agricole – Indecisive or fully withdrawn
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Export credit agencies (ECAs) – From the UK and France showing hesitancy
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Environmental and climate-focused investors – Demanding stricter assurances
This decision affected nearly $3 billion in expected debt financing, putting the total $5 billion funding package in jeopardy.
Why the Hesitation? – Key Factors Behind Lender Reluctance
1. Environmental and Climate Concerns
Activist campaigns and climate watchdogs have consistently targeted EACOP for its:
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Emissions footprint – Projected to emit 34.3 million tons of CO₂ annually
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Ecological risk – The pipeline traverses protected areas, including wetlands and game parks
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Oil spills – Fears of potential leaks impacting Lake Victoria and regional water basins
International banks are under increasing pressure to align their portfolios with ESG (Environmental, Social, Governance) standards and Net Zero 2050 targets, making projects like EACOP politically and reputationally risky.
2. Human Rights and Social Displacement
Over 12,000 people across Uganda and Tanzania are being affected by the pipeline’s right-of-way. While compensation efforts are ongoing, international NGOs like Amnesty International and Friends of the Earth have raised alarms about:
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Delays in compensation
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Lack of livelihood restoration
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Inadequate consultation with local communities
3. Reputational Risk
Lenders are deeply sensitive to the media optics of fossil fuel expansion projects. Given the global momentum around renewable energy, many institutions view backing EACOP as incompatible with their evolving mandates.
How Developers Are Responding: Alternative Funding Options
Faced with a shrinking pool of willing financiers, the project’s developers—TotalEnergies, UNOC, TPDC, and CNOOC—are exploring alternative strategies.
1. China as a Financing Alternative
With Western banks backing out, attention has turned eastward:
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China Exim Bank and ICBC have been approached
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CNOOC’s involvement offers a diplomatic and strategic bridge
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Chinese institutions may not be as constrained by ESG mandates
2. Regional Development Banks
Talks have resumed with institutions like:
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African Development Bank (AfDB)
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Eastern and Southern African Trade and Development Bank (TDB)
These banks are seen as more aligned with Africa’s industrial development goals and may be more open to strategic projects like EACOP.
3. Islamic Finance and Sovereign Wealth Funds
Islamic bonds (sukuk) and sovereign wealth funds from the Gulf (UAE, Qatar) are being explored as debt alternatives and co-investment vehicles.
4. Project Restructuring and Phased Development
Developers are also revisiting project structuring:
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Phased implementation to reduce upfront capital needs
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Off-balance sheet financing models
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Enhanced local content involvement to reduce import costs
Implications for Uganda and Tanzania
The financing delay has ripple effects that go beyond capital markets.
1. Project Timeline May Shift
While developers insist first oil will still be achieved in 2025, procurement and construction delays could push timelines into 2026.
2. GDP Growth and Revenues at Risk
EACOP and related oil projects are expected to boost Uganda’s GDP by 1–2% annually. Delays may affect:
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Revenue flows from oil sales
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Taxation and royalties
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Job creation in oil-related industries
3. Public Sentiment and Political Risk
Given the hype around EACOP as a national priority, any perceived backtracking could stir public and political dissatisfaction.
Medic Holdings’ Perspective: A Strategic Inflection Point
At Medic Holdings Limited, we recognize that challenges often create new opportunities. Our focus remains on energy supply reliability, local content development, and regional growth.
Here’s how we interpret the EACOP financing delays:
1. Demand for Local Services Will Rise
As international participation becomes selective, local firms will play a larger role in:
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Logistics and transport
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Environmental compliance
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Fuel supply and distribution
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Safety and waste management
Medic Holdings is already embedded in this value chain, offering tailored services aligned with the pipeline’s operational demands.
2. Dubai-Based Procurement Offers Resilience
Our UAE arm, Meedek PTL FZE, allows us to:
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Access alternate financing partners
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Engage non-Western suppliers
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Offer cost-competitive procurement options for project contractors
In the face of global uncertainty, our Dubai hub becomes a critical advantage.
3. Green Energy Integration
We are also exploring hybrid models, integrating clean energy into our logistics and operations. This helps meet evolving ESG demands from future project partners.
Voices in the Industry: Stakeholders Speak Out
Ugandan Ministry of Energy
“We remain confident that financing will be secured. Uganda is committed to seeing EACOP succeed—not just for us, but for East Africa’s future.”
– Hon. Ruth Nankabirwa, Minister of Energy and Mineral Development
TotalEnergies
“We are exploring all avenues to ensure the timely and sustainable financing of EACOP.”
– Jean-Luc Guiziou, TotalEnergies Uganda Managing Director
PAU (Petroleum Authority of Uganda)
“Local firms like Medic Holdings have a bigger role to play. We encourage more participation from the private sector.”
– Ernest Rubondo, Executive Director
Outlook: What Comes Next for EACOP?
Short-Term (2024–2025)
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Aggressive push to finalize financing before Q1 2025
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Continued construction and land acquisition
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Lobbying efforts to win back reluctant lenders
Medium-Term (2025–2027)
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First oil expected (if financing is secured soon)
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Full-scale operational deployment across Uganda and Tanzania
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Ramp-up in local content participation
Long-Term (2028+)
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Revenue generation, export stabilization
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Potential for a regional pipeline network expansion
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Industrialization around oil zones (refineries, petrochemicals)
Conclusion: The Road Ahead – Resilience, Strategy, and Adaptation
EACOP’s financing delay in October 2024 may seem like a setback—but it is also a litmus test for Africa’s ability to lead its own development narrative. As banks hesitate and activists push back, the region must respond with innovation, partnerships, and resilience.
At Medic Holdings, we are ready to meet this moment—with the agility of our regional networks, the global reach of our procurement base, and the discipline of our HSSE standards. Whether oil flows in 2025 or 2026, East Africa’s energy journey is unstoppable, and we’re proud to be part of it.
Contact Medic Holdings Limited
📍 Uganda Headquarters
📞 +256 782 097098 | +256 702 097098
📧 [email protected]
📍 Meedek PTL FZE, Umm Al Quwain Free Trade Zone, UAE
🌐 Strategically positioned to serve global procurement needs for East African energy markets.