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Uganda's $5 bln EACOP pipeline faces tough financial obligation talks

Partners establishing the $5. billion East African Crude Oil Pipeline (EACOP) are injecting. more cash into the project to prevent it stalling as financial obligation. financing shows elusive, Uganda's energy minister told Reuters.

Minister Ruth Nankabirwa recently travelled to Beijing to. consult with prospective Chinese funders seen as important for the. success of East African Petroleum Pipeline (EACOP) after 6. Western banks, including BNP Paribas, Société Generale and. Barclays, vowed not to finance the pipeline under pressure. from climate activists.

Connecting oilfields in Uganda to Tanga port in Tanzania,. EACOP is part of a wider $15 billion energy strategy by. TotalEnergies, China's CNOOC and other partners to. establish the Kingfisher and Tilenga discoveries close to Lake. Albert.

With a final decision on debt financing expected before the. year-end, Nankabirwa stated securing funds has actually required extra. lobbying of banks and reorganizing the package to consist of more. stakeholder equity than debt-- departing from a preliminary plan to. have 60% covered by bank loans and 40% by equity.

Nankabirwa said TotalEnergies has agreed to inject. another $400 million, Uganda devoted $45 million more and. Tanzania will be asked for to match that.

Now equity is surpassing debt, from 40% to now almost 52%,. so you see how investors are devoted to look for the cash. to ensure the project does not stall, she said.

As you try to find cash to put in, that means the financial obligation, the. external tranche, decreases, Nankabirwa stated.

EACOP was slated to be funded through $3 billion financial obligation and $2. billion from shareholders.

Leading pipeline shareholder TotalEnergies, with a 62% stake,. stated it does not comment on task funding. Uganda's National. Oil Company and Tanzania's TPDC each hold 15% while CNOOC has. 8%. CNOOC did not reply to ask for comment.

The first Chinese-made pipelines for what could end up being the. world's biggest heated unrefined pipeline are presently being put in. location, officials stated, and specialists need to be paid.

Nankabirwa said throughout her Beijing go to in June she met. with several banks, including the Export-Import Bank of China. She asked to fast-track their financial obligation funding decisions.

Practically a dozen European banks, which she decreased to. name, were likewise thinking about supporting EACOP, regardless of pushback. from activists, Nankabirwa added.

(source: Reuters)