Africa's energy security should come first even as EU parliament tries to entrench energy apartheid on the continent by bullying Uganda and Tanzania over the East African Crude Oil Pipeline (EACOP).
Energy is king, and so is adequate security across all fronts of energy exploration, production, supply and use without any interference from any foreign powers.
In East Africa, EACOP comes to the energy stage with a transformative agenda. EACOP is 1,443km long, stretching from Kabaale, Hoima district in Uganda, to the Chongoleani Peninsula near Tanga Port in Tanzania.
- The EACOP project stands to change the face of Uganda and Tanzania's economy
- The European Union (EU) parliament stated that the EACOP projects limit better environmental operations and expose more climate change impacts
- Both Uganda and Tanzania have stated their stance on the development of the project
The ambitious project has recently drawn international attention--particularly from the European Union (EU) Parliament urging the cancellation of the energy project as it allegedly impacts the environment and human life.
EACOP brings French oil major TotalEnergies, Uganda National Oil Company, Tanzania Petroleum Development Corporation and CNOOC to the table in realizing one of the world's longest heated pipelines.
However, the EACOP project is facing "attacks" left, right and centre from environmental activists to governments, which according to the Ugandan government, seek to derail the project.
EACOP setbacks
The September 14 resolution by the EU parliament condemning the project's execution brought mixed reactions. The Uganda government found no reason to halt the project and urged the EU parliament to stay away from Uganda's oil industry and learn to be tolerant of other people.
Tanzania--which holds 81 per cent of the pipeline path, took another stance on the project. The Tanzanian Ministry of Energy pointed out that the project is implemented safely following international safety, environmental and social aspects, including Human Rights Impact Assessment (HRIA).
According to the Energy Year, EACOP requires USD 15 billion-20 billion in investment over the next four to five years, of which at least 40 per cent is slated to remain in Uganda. Hence the project has faced multiple punches from opposing thoughts over the past two years. The negativity has taken a severe toll on the publicity of the ambitious and essential project between Uganda and Tanzania. 13 banks, including two TotalEnergies' conventional lenders, left the project between 2020 and 2021.
Forecasted to transport 216,000 barrels of oil per day from Hoima in Uganda's Lake Albert region to the Tanzanian Indian Ocean port of Tanga, EACOP suffered a blow in May when seven financiers publicly distanced themselves from supporting the project.
Despite the setback, the Ugandan government remained adamant in progressing alongside oil companies and strategized to secure funds essential for the project's execution.
While the world is discussing the transition to net emissions and zero carbon, another part of the world, Africa, in this case, is throwing its cards on fuel fossils--which is a complicated conundrum that calls for a very strategic approach to understanding.
READ: Tanzania's Oil and Gas Congress opens up new investment horizons
Battle for self-sufficiency
On the scales of fairness, the EACOP project is instead operating on the exact measurements as the other projects like the Ghawar Field in Saudi Arabia, with 3.8 million barrels/year that have explored and utilized crude oil resources for their expanded economic benefits.
All the evidence points towards something more significant as the EU Parliament and climate and environmental activists bully Uganda and Tanzania. At the same time, other investors of the same category, such as Russia, the United States, Saudi Arabia and China, seem to operate with rather no hound-dogs blocking funding behind their backs.
Same for Tanzania, gaining energy self-sufficiency is essential for a nation that hosted an energy congress that drew in more than 1000 participants, including international oil companies and renewable energy stakeholders. During the congress, the Tanzanian minister of energy said that the nation looks forward to bringing at least 20 prospective exploration assets for auction for key players in the sector. And he added that Tanzania is planning to generate 5,000 megawatts by 2025.
Both nations have the right to attain energy supremacy as it has been a long-time ambition. Despite that goal, environmental and climate-related concerns must be addressed if they are present.
The EACOP is one starting point that can catapult the region towards economic mastery and energy sufficiency. Tanzania, which is also banking on natural gas exploration and production, could learn a lot from EACOP complications now.
Despite the challenges, EACOP's potential has managed to draw the attention of other financiers, and things are turning out well. The project has attracted US$300 million from alternative lenders as its proponents rush to save the project from pressure groups citing environmental concerns, according to a report by The Citizen.
"This week, Uganda received an additional pledge of US$200 million from the Afriexim Bank towards erecting the pipeline, whose total cost is US$5 billion. On October 3, Afrexim Bank executives, led by their chairman, Prof Benedict Oramah, said they viewed the implementation of EACOP and related oil and gas projects, including financing of Uganda's refinery, as a strategic business that will uplift African economies' armoury to fight poverty," the Citizen noted.
The saga is reminding the region to assess its energy ambitions and capitalize on the better options and deals on the table. There are plenty of opportunities across the region to explore and capitalize on natural gas, including Mozambique, Tanzania, Nigeria, Algeria and Egypt, to mention of few.
During the Seventh edition of the Uganda International Oil and Gas Summit held in Kampala, Uganda, from September 27 to 28, Ugandan Energy Minister, Ruth Nankabirwa, expressed her aspirations on African energy self-sufficiency in the current wave of transition from fossil fuels to renewable energy.
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The minister argued that Uganda is aware of the global push from fossil fuels to clean energy. Still, the country's oil and gas projects are critical to enabling it to make the energy transition and should be accorded patience and understanding of the stage of its development (The East African).
"As a country, we are earnestly pursuing energy integration before we can talk about energy transition," she said.
Further, Nankabirwa pointed out that the Lake Albert oil and gas projects will see the government supply LPG to its citizens that still use biomass. More importantly, the oil and gas sector will thus play a key role in enabling the country to attain its climate change obligation as it provides cleaner energy options.
East Africa is transforming its energy strategies and placing itself in a competitive stage in the sector. During the congress, it was revealed that in Uganda refinery is underway to process 60,000 barrels a day. According to the Ugandan energy minister, the final investment decision is expected to be settled in June 2023.
Further, the project stands to offer benefits in terms of tax revenues for Tanzania and Uganda, job creation, national content, new infrastructure, logistics, skills and technology transfer and expansion of the trade corridor between Uganda and Tanzania.
READ: EACOP: EU Parliament meddling show Africa should aggressively pursue independence
