Financing Secured for Uganda-Tanzania Oil Pipeline Project
A combination of shareholders’ equity, commercial loans, and sponsor debt facilities has successfully secured financing for the regional oil pipeline project. This development marks the conclusion of a complex deal that has faced sustained opposition from environmental campaigners who had sought to halt the construction of what will be the world’s longest heated crude oil pipeline, stretching from oilfields in western Uganda to the Port of Tanga in Tanzania.
Senior Ugandan government officials recently confirmed that the project’s backers have already secured funding deals. Irene Batebe, Uganda’s Permanent Secretary at the Ministry of Energy, stated that shareholders have provided equity since the final investment decision (FID) in February 2022. The banks and sponsor debt facilities were secured earlier this year, ensuring the project is now fully funded until First Oil.
This follows bonds issued by TotalEnergies in February and June, with part of the proceeds going toward the pipeline’s construction. This move surprised observers who had expected financing to come primarily from China. The project is set to achieve its First Oil milestone in the second half of 2026, with the upstream operator China National Offshore Oil Corporation (Cnooc) at Kingfisher oilfield having now surpassed the number of drilled wells needed to produce the first barrels of crude from the Albertine Graben.
Last month, Cnooc geologists reported that Kingfisher had drilled 16 wells, 15 of which were already cased and cemented, and all producing wells had confirmed oil, keeping the field on schedule for the government’s target.
The Tilenga project, designed to produce up to 190,000 barrels per day, is also nearing readiness, adding pressure on the midstream crude export pipeline meant to transport Uganda’s oil to international markets.
Financial Milestones and Debt Tranches
According to Ms. Batebe, $775 million was disbursed in March 2025. Since then, additional banks have joined, raising the commercial bank debt facility to $1.2 billion, with further refinancing discussions ongoing. “Therefore, Eacop is fully funded and financed,” she said.
The $755 million raised earlier came through a syndicated loan from local, regional, and international lenders, plugging financing gaps and pushing Eacop to 72 percent completion. “The final tranche of debt will come from Chinese banks. Seven other banks have come on board, some local and others East African,” said Peter Muliisa, chief legal officer at the Uganda National Oil Company (Unoc).
Project Updates and Engineering Progress
Project updates show horizontal directional drilling at the Sigi River is ongoing, with 38-inch, 44-inch, and 50-inch reaming works completed in the third quarter, and 54-inch reaming underway in preparation for pipe pulling. The third quarter also marked the arrival of the last shipment of line pipes at the Port of Dar es Salaam, concluding a major supply contract by Chinese manufacturer Chu Kong Steel Pipe, which shipped over 87,000 pipe joints over two years.
“We are at a point where we can’t stop. We are not panicking over financing,” Mr. Muliisa said. “Laying of line pipes is targeted for the end of December. We’ve done pretty much all the engineering [work] on the Ugandan section, except for a few kilometres.”
Environmental Concerns and Financing Shifts
Since 2020, environmental groups have campaigned against the Hoima–Tanga pipeline and its associated upstream projects, Kingfisher and Tilenga. They argue that the heated 24-inch pipeline, designed to transport Uganda’s waxy crude at 50°C, will produce millions of tonnes of greenhouse gas emissions.
The #StopEACOP campaign prompted many Western banks initially lined up for debt financing to withdraw, forcing shareholders to raise additional equity. This reversed the original 60:40 debt-equity split to a 52:48 ratio for the $5 billion project.
In separate interviews, officials said the final tranche of debt will come from Chinese lenders and the seven banks that have since joined the financing of the 1,443-kilometre pipeline.
When it became apparent that Western lenders would not bankroll the project, Eacop shareholders in 2023 went on a mission to China, initially targeting $3 billion to bridge the shortfall. However, Chinese lenders Exim Bank and Sinosure reportedly committed smaller amounts.
But, other banks later joined, including the African Export-Import Bank, the Islamic Corporation for the Development of the Private Sector, Standard Bank of South Africa, Stanbic Bank, and KCB Uganda, leading to the $755 million debt close in March.
Eacop Financiers and Bond Issuances
In total, Eacop’s cost is estimated at $5.6 billion, covering capital expenditure, historic costs, and financing. The project’s engineering, procurement, and construction budget is funded through shareholder equity, sponsor debt facilities, and commercial loans, according to Ms. Batebe.
In a recent update, Netherlands-based BankTrack, which monitors financing of environmentally and socially risky projects, noted that some Western lenders that had distanced themselves from Eacop have since underwritten bonds for TotalEnergies, the project’s lead investor.
An Ernst & Young audit of Eacop Ltd — the entity overseeing the pipeline’s construction and operations — showed that the first debt tranche amounted to $755 million. The audit also revealed that additional facilities were signed with shareholder-affiliated companies to fund the remaining portion of the budget, prompting TotalEnergies to seek sponsor debt facilities to avoid delays.
Eacop shareholders include TotalEnergies (62 percent), Unoc (15 percent), Tanzania Petroleum Development Corporation (15 percent), and Cnooc (eight percent).
In February 2025, TotalEnergies issued €3.15 billion ($3.62 billion) in bonds underwritten by Citi, Santander, Mizuho, Société Générale, Standard Chartered, and UniCredit. The bonds included €1 billion ($1.14 billion) maturing in March 2033, €1.3 billion ($1.49 billion) maturing in 2045, and €850 million ($976 million) maturing in 2037.
In June, the French energy major issued a second round of bonds worth €3 billion ($3.44 billion), underwritten by Citi, BBVA, Deutsche Bank, JPMorgan Chase, MUFG, Royal Bank of Canada, Société Générale, and Wells Fargo. This tranche comprised €900 million ($1.03 billion) maturing in 2040, €1.1 billion ($1.26 billion) maturing in 2035, and €1 billion ($1.14 billion) maturing in 2031.
“These banks seem to have seen their commitment as a very narrow one – they committed not to join a project finance loan that would be exclusively for Eacop,” says Ryan Brightwell, BankTrack’s Human Rights Campaign Lead. “When it comes to general-purpose financing for TotalEnergies, the banks probably hope there is more distance between their finance and the project,” he argues.