EACOP Gets Investment License, Financing Deals Due for Conclusion This Year
The East African Crude Export Pipeline (EACOP) Company Ltd has received an investment license from the Uganda Investments Authority, UIA, which will enable it access the various incentives offered by the government.
In January this year, EACOP Ltd received a construction license from the Ministry of Energy and Mineral Development paving the way for the company commence construction works for the 1,443 kilometre pipeline from Hoima to the Tanzanian port of Tanga.
Now, with this investment license, Angelo Izama, UIA Director Domestic Participation says EACOP’s operations should be eased during the construction phase and when it commences business, including tax holidays, training tax rebates and others.
The incentives given to investors are funded by the taxpayer and are aimed at promoting investments in the country, especially if the investment has multiplier effects like job creation among others.
According to Izama, this policy costs the public close to 2.5 trillion shillings in a year. He says however, it is necessary for the support of important ventures, the reason that EACOP should keep in mind and comply to all the legal and regulatory requirements.
The EACOP project has been under criticism especially by some local and foreign NGOs calling on the owners to suspend its operations, on claims that it was violating environmental and human-rights standards.
These have targeted global lenders and insurance companies lobbying or intimidation them out of any plans to fund the project. Some of the shortcomings that the crusaders claim, include evictions, undervaluation of properties for compensation and disregard of the ecosystem.
John-Bosco Habumugisha, EACOP Ltd Deputy Managing Director, says they are confident that they have operated according to national and international standards that global lenders require.
An independent survey of the oil and gas activities in the Albertine graben commissioned by Barclays Bank concludes that TotalEnergies and its joint venture partners and contractors have largely adhered to the requirements.
The report says delayed disbursements of money and other resettlement packages are the main challenge noted, and this was mainly due to the effects of Covid 19. However, it notes, provisions were put in place where payment was delayed either due to ongoing discussions or other issues, including a 15 percent additional pay.
Habumugisha says that EACOP and the shareholders are getting closer to concluding the financing agreements, adding that the talks are going on well, with conclusion in sight before the end of this year.
On her part, Samantha Muhwezi Kassami, the EACOP Legal officer appealed to the public to seek to rely of official information regarding the oil and gas industry, instead of rumours. She was referring to the campaign of the crusaders against EACOP who have caused uncertainty about whether the project would get the financing it needs.
She also reiterated that the ruling by a court in Paris in favour of TotalEnergies and EACOP, a win by the sector because the judges confirmed that the Duty of Vigilance Act was being followed as the companies develop the oil and gas resources.