In an open letter to financial services provider Standard Bank and 24 other banks, 263 community and nonprofit organisations from 49 countries have called on the banks not to fund the construction of the world’s longest heated crude oil pipeline, namely the East African Crude Oil Pipeline (Eacop) proposed by oil and gas multinational Total and China National Offshore Oil Corporation (CNOOC).
The 263 organisations are demanding that Total provide full and fair compensation to communities already affected by the project, and are calling on banks to publicly rule out providing any funding for the construction of the pipeline and to work with governments and other financiers to promote a sustainable energy future for East Africa based on clean alternatives instead of oil.
The organisations highlight the threats that the 1 445 km Eacop could pose to local communities, water supplies and biodiversity in Uganda, Tanzania, the Democratic Republic of Congo and Kenya. They also warn that the pipeline will fuel climate change by transporting oil that will generate more than 34-million tons of carbon emissions each year.
"With a final investment decision nearing, African and international organisations call on banks not to participate in loans to fund the $2.5-billion 'manifestly irresponsible' project."
Nearly a third of the pipeline will run through the basin of Africa’s largest lake, Lake Victoria, and more than 40-million people depend on this basin for water and food production. The pipeline will cross more than 200 rivers, run through thousands of farms and cut through vital wildlife reserves, the organisations noted.
"The pipeline is expected to cost about $3.5-billion [to develop]. Of this, about $2.5-billion will be borrowed from banks and other financiers. It is not yet clear which banks intend to participate, although the three banks acting as financial advisers are likely to join and act as lead arrangers," the organisations said in a joint statement.
The letter to the three banks acting as financial advisers for the project, namely Standard Bank, Sumitomo Mitsui Banking Corporation and Industrial and Commercial Bank of China, as well as 22 other banks that have recently provided finance to Total and CNOOC, comes as speculation mounts that a final investment decision is imminent, which would commit Total to mobilise capital for the project.
Signatories to the open letter include Friends of the Earth International, 350.org, the Catholic Agency for Overseas Development, Reclaim Finance, Sierra Club, Global Witness, the IUCN National Committee of the Netherlands, BankTrack, Africa Institute for Energy Governance and Inclusive Development International.
Several organisations that played prominent roles in opposing North American pipeline projects including the Dakota Access Pipeline and Keystone XL also signed the letter.