Investors need USD 5bn to construct EA crude oil pipeline

By Our Reporter

24^th Jan 2024

Investors in charge of the East African Crude Oil Pipeline project will require five billion US dollars to construct it.

The cost of constructing the longest heated crude oil pipeline from Hoima in western Uganda to Tanga in Tanzania had been estimated to cost USD 3.5 billion.

At the time, the shareholders were required to raise $2.5 billion and $1 billion in equity to finance the project.

The Minister of Energy and Minerals, Ruth Nankabirwa on Tuesday confirmed that the cost for the project has shot up to five billion dollars.

After COVID-19, we realized that there was an increase in everything.

And so the board sat and agreed that it is necessary to appreciate that everywhere in the world materials are expensive, Nankabirwa explained.

It means that the shareholders including the Uganda National Oil Company (UNOC) will have to ask for more money from the treasury to meet its obligations.

Some observers and analysts of the oil and gas sector had predicted that the cost was likely to rise due to factors like inflation and the rising material costs amidst the delay in the commencement of construction.

Penina Ahebwa, the Director for Economic and National Content Monitoring at the Petroleum Authority of Uganda (PAU) said while the shareholders should be worried about the rise in cost, the country at large shouldn’t be alarmed.

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