Banks must avoid financing oil pipelines in East Africa
NAIROBI, March 1 (Thomson Reuters Foundation) – More than 260 charities on Monday urged banks not to fund a $ 3.5 billion oil pipeline in East Africa, fearing the project could lead to the loss land and community livelihoods, environmental destruction and increased carbon emissions. .
French company Total and the China National Offshore Oil Corporation are expected to begin work soon on a 1,445 km (900 mile) pipeline between western Uganda and neighboring Tanzania to the port of Tanga in the Indian Ocean. .
About two-thirds of the cost of the pipeline will be financed by debt, and a Ugandan unit of the Standard Bank Group in South Africa, Sumitomo Mitsui Banking Corp of Japan and the Industrial and Commercial Bank of China are jointly considering raising the financing, said. charitable organizations.
An open letter signed by 263 charities – including the African Institute for Energy Governance, the Alliance for Food Sovereignty in Africa, Greenpeace and Friends of the Earth – urged banks not to grant ready for the program.
“In light of the climate change crisis, many countries are committed to cleaning up their energy systems by promoting renewable energies,” said Diana Nabiruma of the African Institute for Energy Governance, one of the signatories, in a press release.
“No responsible bank should finance the East African Crude Oil Pipeline Project (EACOP) knowing that the economic, environmental, climatic and social risks of the project are too immense.”
The letter also called on 23 other banks to exclude funding for the project.
Uganda is eager to accelerate the plan to start pumping crude oil, which President Yoweri Museveni hopes will help revive an economy hard hit by the coronavirus pandemic.
Landlocked Uganda discovered crude oil reserves around 14 years ago, but commercial production has been delayed in part due to a lack of infrastructure, such as an export pipeline.
International and local environmental groups have raised concerns about the risks posed by the pipeline, but last December the Ugandan National Environmental Management Authority (NEMA) issued a certificate of approval for a report. environmental and social impact assessment submitted by Total.
With Tanzania having already given its approval, the Ugandan stamp signified that the project had environmental impact certification along its entire length.
But charities said on Monday that around 14,000 families would risk losing their land if the pipeline proceeds, as it could pass through more than 400 villages in Uganda and Tanzania.
Almost a third of the pipeline will cross the basin of Africa’s largest lake, Lake Victoria, on which more than 40 million people in countries like Kenya, Uganda, Tanzania and Burundi depend for the production of water and food.
It will also cross 200 rivers, thousands of farms and vital wildlife reserves, and will also fuel climate change by transporting oil that will generate more than 34 million tonnes of carbon emissions each year, the letter says.
Standard Bank said in an emailed statement to the Thomson Reuters Foundation that it had hired an independent environmental and social advisor to visit the project and produce a due diligence report.
The bank was already reviewing a preliminary report.
“We support responsible investing by assessing and managing our environmental, social and governance (ESG) risks,” the bank said.
“Standard Bank’s new fossil fuel financing policy sets strict conditions for lending to fossil fuel projects. Among other conditions, owners must commit to minimizing or reducing greenhouse gas emissions. “
Representatives of Sumitomo Mitsui Banking Corp could not be contacted immediately by the Thomson Reuters Foundation, and the Industrial and Commercial Bank of China did not respond to requests for comment.
China National Offshore Oil Corporation and Total did not immediately respond to a request for comment, but the French company said the pipeline was designed “with the primary concern of minimizing and mitigating impacts on local communities.”
He said adequate compensation, housing and livelihood programs would be provided to affected households. (Reporting by Nita Bhalla @nitabhalla; Editing by Helen Popper. Please mention the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, which covers the lives of people around the world who are struggling to live freely or fairly. news.trust.org)