A long-term Egyptian recovery in place since currency devaluation in 2016 can resume after the war between Russia and Ukraine ends, Mathias Althoff, ... partner at Swedish frontier markets investor Tundra Fonder, tells The Africa Report.
The company is “proud” to have won the contract, the company said in a statement on May 9. EACOP is planned to transport about 216,000 barrels of oil per day from Lake Albert in Uganda to Tanga port in Tanzania. France’s TotalEnergies and the state-owned China National Offshore Oil Corporation (CNOOC) are the main investors in the project, which will include the world’s longest electrically heated pipeline. Construction is due to begin later this year, with the first oil scheduled for 2025.
Winning the logistics contract is “no reason for pride or celebration”, says Robyn Hugo, director of climate change engagement at South African shareholder activism organisation Just Share. “Bolloré will be a party to a project responsible for emitting millions of tons of harmful, unnecessary carbon emissions annually, and to the exploitation of Uganda’s resources for the benefit of foreign countries and multinational corporations with no interest in the health and well-being of Ugandans.”
- “This pipeline will not even help to improve local access to reliable, affordable energy,” Hugo says. “The consequences for East Africa will be disastrous.”
- A spokesperson for Bolloré Logistics declined to comment on why the company is participating, citing the terms of the non-disclosure agreement it has signed.
- Our enquiry concerned the rationale for wanting to be part of the project, rather than the terms of the agreement. Bolloré Logistics did not respond when this was put to them.
Campaigning groups such as BankTrack have argued that, on top of carbon emissions, ECOP poses environmental and social risks to protected wildlife areas, water sources and communities in Uganda and Tanzania. South African banks Absa, Investec, Nedbank and First Rand have all ruled out financing the project, while Standard Bank says it wants to assess the carbon-reduction targets of partners in the project before deciding. Banks including HSBC, Barclays, BNP Paribas and Credit Suisse have said they won’t take part.
READ MORE Africa's Great Green Opportunity
In April, the world’s largest reinsurer Munich Re said it will not underwrite the project, joining Hannover Re, Swiss Re, Axa, Allianz, Zurich and SCOR. Research from Fitch Solutions in April says that the reputational risk for companies involved is not likely to abate, with activists continuing to hope that they will be able to prevent construction from starting.
- While the cancellation of the project is not Fitch’s core view, this remains a “significant risk,” the research says.
The Bolloré statement said the agreement will create opportunities for employment, subcontracting and training in Uganda and Tanzania. BankTrack argues that EACOP will create a total of 5,000 jobs of which only 300 will be permanent and that this is overshadowed by the potential loss of jobs in tourism. About 40% of the Lake Albert oil is located in the Murchison Falls National Park, Uganda’s largest park and a popular tourist destination.
- The project poses “severe climate, social and environmental risks, and faces significant local community and global civil society resistance, including litigation,” says Hugo at Just Share.
- “Investing in renewable energy, tourism, small-scale agriculture, fishing and reforestation will provide far more jobs to local communities, a wider range of economic benefits for East Africa and a healthier and more stable environment.”
Bolloré needs to explain why it thinks the benefits of EACOP outweigh the negative impacts.
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