Definite Decision Fluctuates for Standard Bank on the Heated R75bn Uganda Pipeline Project

The prospective and highly controversial R75 billion ($4 billion) crude oil pipeline project that aims to link Uganda and Tanzania has overcome a principal obstacle, delaying its final decision, Standard Bank revealed. The negotiations between implicated parties can now wrap up after Tanzania resolved a disagreement with some Chinese financiers on a separate situation, divulges Kenny Fihla, CEO of the lender's commercial and investment banking division.

Standard Bank has been on standby for this resolution, positioning itself for a possible $100 million investment in this significant project. This investment will only be decided upon once the project developer, TotalEnergies, China's CNOOC, and both the governments of Uganda and Tanzania, agree on the project's financing structure.

While awaiting the negotiations, Standard Bank is also anticipating the conclusion of an environmental and social impact assessment study, CEO Sim Tshabalala indicated last week. The bank is notably apprehensive about the potential negative environmental effects of the pipeline, and the displacement of about 118,000 people.

By contrast, the economic results of the project on Uganda's economy are undeniable, says Fihla. The completion of this audacious project will ultimately qualify as the world's longest heated pipeline, transporting oil across 1,443 km (897 miles) at a peak capacity of 246,000 barrels a day starting 2025.