Standard Bank Group Ltd. said it is set to move forward with funding for TotalEnergies SE’s planned East Africa Crude Oil Pipeline project after completing a years-long review.
The $5 billion pipeline, which would stretch from Uganda’s oil discoveries to an export terminal on the coast of Tanzania, has faced strong opposition from environmental groups that have scrutinized potential lenders. Standard Bank, Africa’s biggest lender, in 2021 hired an independent adviser to help it decide on involvement in the project.
“We have done our governance processes internally,” Standard Bank Chairman Nonkululeko Nyembezi said in an interview in Rio de Janeiro. That includes a credit review and “the environmental and social due diligence, which took quite a long time,” she added.
Groups opposed to the pipeline, known as EACOP, have asked banks to shun the project, arguing that it will harm wildlife habitats, impact communities and increase greenhouse gas emissions. Residents displaced by its construction have been inadequately compensated and had their lives disrupted, according to a Human Rights Watch report.
At the same time, Ugandan President Yoweri Museveni has rallied in support of the project, publicizing its backing by China’s leader, Xi Jinping. The pipeline’s cost has increased to $5 billion from an earlier estimate of $4 billion, Uganda’s energy minister said in January.
“We have all the lenders,” Nyembezi said, declining to identify them. She didn’t comment on the total amount of funding.
She said Standard Bank is limited in how much more it can say publicly until there is a decision on the pipeline’s funding. The lender expects TotalEnergies to make an announcement over the next few months, adding that field developments are underway.
There is “complete commitment on the part of the sponsors of the oil projects to get it done,” Nyembezi said.
TotalEnergies didn’t immediately respond to a request for comment.