CLIMATE CAPITAL

Uganda Increases Equity in $5B Oil Pipeline Amid Debt Delays

Uganda is intensifying efforts to fund the $5 billion East African Crude Oil Pipeline (EACOP), set to transport crude from western Uganda to Tanzania’s port of Tanga. Facing delays in debt financing, Uganda has increased its equity stake from 40% to 52%, Energy Minister Ruth Nankabirwa announced in a virtual interview on October 31, 2024.

Published

4 weeks ago

November 5, 2024

Charles Wachira

The 1,445-kilometer EACOP is set to become the world’s longest heated crude oil pipeline, running through Uganda and Tanzania.

: Uganda raises equity share to 52% for East African Oil Pipeline due to debt delays, securing funding for critical infrastructure boosting regional growth.

Uganda is ramping up its efforts to secure funding for the $5 billion East African Crude Oil Pipeline (EACOP), a major infrastructure project designed to transport crude oil from its fields in western Uganda to the Tanzanian port of Tanga.

In response to delays in securing debt financing, the Ugandan government has adjusted its funding structure, increasing the equity ratio from 40% to 52%, according to Uganda’s Energy Minister Ruth Nankabirwa, who spoke about the shift in a virtual interview on Tuesday, October 31, 2024.

With the new structure, debt financing will cover the remaining 48%, a move expected to enhance investor confidence and ensure smoother progress on the project.

“Uganda is committed to making this project a reality,” Nankabirwa said. “By increasing the equity ratio, we are signaling our determination to see this pipeline through to completion, despite the challenges we’ve faced in securing debt.”

The EACOP, which spans approximately 1,445 kilometres, is projected to be the longest heated crude oil pipeline in the world, traversing both Uganda and Tanzania.

The pipeline is critical to Uganda’s energy strategy as it seeks to become a net oil exporter by 2027.

First launched in 2006, Uganda’s oil industry has seen numerous delays, often related to regulatory, environmental, and financial challenges.

The pipeline project, however, gained renewed momentum in 2021 when Uganda and Tanzania signed a series of agreements, including the Host Government Agreement and the Tariff and Transportation Agreement, setting the stage for construction.

A Boost to Uganda’s Oil Ambitions

The increase in equity ratio represents a calculated shift in Uganda’s approach to financing the pipeline, which is jointly owned by Uganda, Tanzania, and oil companies TotalEnergies and China National Offshore Oil Corporation (CNOOC).

By raising its equity investment stake, Uganda is responding to global concerns around the environmental impact of fossil fuel projects, which have made some international lenders hesitant to participate.

The pipeline’s construction and eventual operation are also expected to deliver economic benefits for Uganda, potentially generating 12,000 jobs during the construction phase and contributing to Uganda’s GDP growth through oil revenues.

Uganda holds an estimated 6.5 billion barrels of oil reserves, of which 1.4 billion barrels are recoverable. The EACOP project will be instrumental in connecting Uganda’s oil fields in the Lake Albert Basin to the international market, a vital step in achieving the government’s oil production targets.

“This is a transformative project for Uganda,” said Nankabirwa. “Once completed, it will place Uganda on the map as an oil-exporting country and drive significant economic growth for our citizens.”

Progress and Challenges

Despite the anticipated economic benefits, the pipeline has faced criticism from environmental groups concerned about its ecological impact.

In 2022, activists campaigned to halt the project, citing risks to biodiversity, water sources, and the displacement of local communities.

In response, Uganda and its partners have implemented measures to mitigate environmental risks, including advanced monitoring systems and strategies for minimal land disruption.

Construction on the pipeline began in 2023 with initial site preparations, but the challenges in raising debt financing have caused delays.

The pipeline is now projected to be completed by 2027, assuming financing issues are resolved in the coming year.

According to the Ministry of Energy and Mineral Development, increasing the equity share aligns with a broader strategy to attract alternative forms of investment, particularly as Uganda seeks to diversify its funding sources.

Regional and Geopolitical Implications

The EACOP will not only strengthen Uganda’s energy sector but also fortify East Africa’s strategic infrastructure.

Tanzania, which stands to benefit through transit fees and regional influence, has also voiced its support for the project. The two countries have been actively promoting the pipeline to international investors, touting it as an avenue for regional integration and economic empowerment.

Dr. Frank Kabuiya, an economist specializing in East African regional development, highlighted the pipeline’s potential impact. “This is more than just an oil pipeline,” he noted in a recent industry roundtable.

“It’s a critical link that could shift East Africa’s standing in the global energy landscape and foster deeper regional ties.”

The increase in equity investment in the EACOP underscores Uganda’s commitment to seeing the pipeline through to completion, amidst environmental concerns and financial challenges.

The government’s decision may prove pivotal in solidifying the project’s viability, paving the way for Uganda to join the ranks of oil-exporting nations and cementing the East African region’s role in the global energy economy.

With Uganda’s equity increase, the EACOP is now one step closer to its intended launch, signaling both optimism and resilience in Uganda’s oil industry.

Keywords: Uganda oil pipeline, East African Crude Oil Pipeline, EACOP funding, Uganda equity investment, oil export infrastructure

Startups & Funding

Top 10 Richest East Africans Under 30: Industries & Net Worth

Published

1 hour ago

December 2, 2024

Charles Wachira

: Discover the top 10 wealthiest East Africans under 30, their industries,
achievements, and estimated net worths. Learn about their remarkable journeys
to success.”

Kenneth M. Njeru (25, Kenya)

○ Engagement: Founder of Africa Afya Healthcare, focusing on healthcare investment services and IT solutions for healthcare access improvement.
○ Industry: Healthtech and healthcare investment.
○ Net Worth: Not publicly disclosed but prominent in healthcare financing in Kenya

Ayushi Chandaria (26, Kenya)

○ Engagement: Founder of Design Thinking Program, fostering innovation in education.
○ Industry: Education and innovation.
○ Net Worth: Not publicly disclosed but recognized for her impactful work in Kenya

Alex Mativo (29, Kenya)

○ Engagement: Co-founder of E-LAB, Nanasi, and Duck, leveraging technology in multiple sectors.
○ Industry: Technology and entrepreneurship.
○ Net Worth: Estimated at several million USD due to diversified ventures
.

Prisca Wegesa Magori (29, Tanzania)

○ Engagement: CEO and Co-founder of TenTen Explore and Smart EFD, providing innovative software solutions.
○ Industry: Technology and software development.
○ Net Worth: Undisclosed but influential in Tanzania’s tech scene

Andrew Ddembe (28, Uganda)

○ Engagement: Co-founder and CEO of MobiKlinic, providing mobile-based healthcare solutions.
○ Industry: Healthtech.
○ Net Worth: Not disclosed but a key figure in Uganda’s health innovation

Arooj Sheikh (28, Kenya)

○ Engagement: Founder and CEO of Beyond Kenyan Bars, working on social justice initiatives.
○ Industry: Social entrepreneurship.
○ Net Worth: Undisclosed, focusing on impactful social change
.

Hildah Magaia (29, Tanzania/South Africa)

○ Engagement: Professional footballer for Mazatlán FC and Tanzania’s national team.
○ Industry: Sports.
○ Net Worth: Significant from sports and endorsements

Chad Jones (28, Kenya/South Africa)

● Engagement: Social media influencer and brand ambassador.
● Industry: Digital media and marketing.
● Net Worth: Not disclosed but has significant brand partnerships

These individuals have demonstrated remarkable entrepreneurship and talent across East Africa, contributing to industries like health, technology, education, sports, and tourism.

CLIMATE CAPITAL

Access Bank Secures CAK Approval for National Bank Acquisition

Published

1 month ago

October 30, 2024

Charles Wachira

: Access Bank to acquire National Bank of Kenya for $100M, boosting market
share to 1.9% with CAK approval and workforce retention conditions.

CAK Approves Access Bank’s Acquisition of NBK with Conditions

The Competition Authority of Kenya (CAK) approved Access Bank’s acquisition of the
National Bank of Kenya (NBK) from KCB Group, requiring Access Bank to retain 80% of
NBK’s workforce for at least one year.
The Central Bank of Kenya (CBK) must now give its final approval for the deal.

Employment Retention Key to Approval

According to CAK, Access Bank must maintain 80% of NBK’s 1,384 employees and all
316 staff from its local subsidiary, Access Bank Kenya, for a year following the
transaction’s completion. “The transaction has been approved on condition that Access
Bank Plc retains, for one year, at least 80% of the target’s current workforce,” CAK
stated.

Deal Valuation and Finalization Timeline

While the deal’s value has not been disclosed, KCB Group announced in March 2024
that NBK would be sold for 1.25 times its book value. With NBK’s 2023 book value at
$79.77 million, the acquisition is estimated to be worth approximately $100 million. The
transaction is expected to conclude in November.

Expanding Access Bank’s Kenyan Presence

Access Bank’s current footprint in Kenya includes 23 branches in 12 counties. Acquiring
NBK’s 77 branches across 28 counties will significantly boost its presence and service
offerings, including retail, corporate, and Islamic banking. Access Bank, currently
ranked as a tier 3 lender, will integrate with NBK, a tier 2 institution, enhancing its status
in the market.

The acquisition will give the merged entity a 1.9% market share in Kenya’s banking
sector. “The combined market size is unlikely to raise competition concerns since it is
low,” CAK noted. “The merged entity will face competition from other banks in the
market. Based on this, the transaction is unlikely to substantially lessen or prevent
competition.”

CLIMATE CAPITAL

Patricia Ithau: CEO of WPP-Scangroup, Leading Africa’s Marketing Giant

Published

3 weeks ago

November 14, 2024

Charles Wachira

: She leads WPP-Scangroup PLC, the largest marketing and communication group in sub-Saharan Africa, driving innovation, business growth, and social impact across the region.

Patricia Ithau leads WPP-Scangroup PLC, the largest marketing and communication group in sub-Saharan Africa. She took over as CEO on March 14, 2022, succeeding Bharat Thakrar at the helm of this Nairobi Securities Exchange-listed company.

Under her visionary leadership, WPP-Scangroup continues to redefine the marketing and advertising landscape in East Africa through a multi-agency, multi-disciplinary approach.

Her focus on pushing the boundaries of creativity and innovation has positioned the company to drive growth and deliver groundbreaking solutions across the region.

Early Life and Academic Foundation

Patricia’s leadership journey grew from a strong academic foundation.

Patricia Ithau studied at Loreto Convent Msongari in Nairobi before earning her Bachelor of Commerce degree from the University of Nairobi.

Further expanding her knowledge, she earned an MBA in Strategic Management from the United States International University-Africa.

She also completed advanced management programs at prestigious institutions like Strathmore University, IESE Business School, INSEAD, and Oxford University, laying the foundation for a distinguished career in business leadership.

Career Milestones: L’Oréal Africa and Beyond

Before joining WPP-Scangroup, Patricia was the founding CEO of L’Oréal Africa, where she significantly drove the company’s growth and success in the region.

Under her leadership, L’Oréal’s African subsidiary generated $25 million in annual revenue, employed over 270 people, and produced 40 million units annually.

One of her key achievements was leading one of the first acquisitions of a local business by a multinational in East Africa, demonstrating her ability to drive growth and market penetration in the competitive FMCG sector.

Advocacy for Women in Leadership

Patricia has actively championed women in leadership, advocating for creating opportunities that allow women to thrive in the corporate world.

As an Ambassador for the Women on Boards Network (WOBN) in Kenya, she has worked to elevate women into leadership positions.

She holds board positions at organisations such as ABSA Bank Kenya, Jambojet Ltd, Vivo Fashion Group, and the British Chamber of Commerce.

Furthermore, Patricia actively supports corporate governance and social impact as a Trustee for the Vodafone Foundation (UK) and the M-PESA Foundation.

Overcoming Personal Challenges and Building Resilience

In addition to her professional achievements, Patricia’s journey has been marked by resilience.

She was crowned Miss Kenya in 1986 during her first year at the University of Nairobi.

Navigating societal judgments and stereotypes during this period helped shape her leadership abilities, teaching her invaluable lessons in self-confidence and perseverance.

Recognition and Awards

Patricia’s contributions to Kenya’s economic growth and development have not gone unnoticed.

In 2020, she was awarded the Head of State Commendation (HSC) for her outstanding role in business development.

Patricia is also an accredited executive coach and certified Emotional Intelligence practitioner, emphasising her commitment to fostering future leaders who embrace emotional intelligence and holistic leadership practices.

Patricia’s leadership extends beyond the corporate world.

As East Africa Regional Director for the Stanford Institute for Innovation in Development Economies (SEED), Patricia has driven sustainable business growth and job creation across sub-Saharan Africa.

Through SEED, she has supported over 200 businesses in tackling leadership challenges and fostering innovation, contributing significantly to the region’s economic transformation.

Family and Personal Values

Patricia is also deeply committed to her family.

She proudly raises her two daughters, Mueni and Makena, instilling in them the values of hard work and resilience.

Her role as a mother aligns with her broader mission of mentoring and guiding the next generation of leaders.

Conclusion: A Legacy of Leadership and Innovation

Patricia Ithau leads with vision, innovation, and a strong commitment to social sustainability, from her strategic achievements at L’Oréal Africa to her current role as CEO of WPP-Scangroup.

Her dedication to advancing women in leadership, her contributions to the business community, and her efforts in developing future leaders make her a lasting influence on Africa’s corporate sector, inspiring and driving progress across the region.