IN a significant development, Uganda’s presidency announced on Friday that China has extended an invitation to Uganda’s energy minister to discuss the country’s ambitious $5bn crude oil pipeline project in Beijing.
This move could mark a breakthrough for Uganda, which has been seeking Chinese financiers to support the crucial pipeline. The project is essential for Uganda to commence crude oil production from oilfields discovered back in 2006.
The potential involvement of Chinese funding gains prominence after Western banks hesitated to finance the pipeline due to pressure from environmental groups, citing concerns over its impact on global carbon emissions.
During a meeting between China’s special envoy for Horn of Africa Affairs, Xue Bing, and President Yoweri Museveni on Thursday, Chinese President Xi Jinping conveyed his support for the 1,445-km (898-mile) pipeline project. President Xi expressed his backing for the initiative, stating, ‘I am in full support of EACOP. I believe that it will enhance socio-economic development for the region.’
In response, Museveni’s office affirmed that Chinese financial institutions are receptive to discussions regarding the project, extending an invitation to Ruth Nankabirwa, the Minister of Energy and Mineral Development, to visit China for further deliberations.
Discussions between Uganda and the Chinese export credit agency SINOSURE for potential funding have been ongoing. However, previous deadlines for concluding these talks have passed without resolution.
Construction activities for the East African Crude Oil Pipeline (EACOP) have already commenced, with transportation of pipes and materials to sites in Tanzania and Uganda underway. Notably, a thermal insulation plant to prepare the pipes for installation commenced operations in late March, indicating progress in the project’s implementation.