Africa-Press – Uganda. The lawmakers on Parliament’s National Economy yesterday postponed discussion on the Ministry of Finance’s request to borrow $130m (Shs475b) from the domestic market to finance Uganda’s 15 per cent stake in the proposed East African Crude Oil Pipeline (EACOP).
For the most part, MPs raised concern about the high-interest rates synonymous with domestic borrowing and government’s excessive appetite for borrowing that has seen total debt overshoot “near to the limit”, according to the recently released Auditor General’s annual report.
The committee chairperson, Ms Syda Bbumba (Nakaseke North County), tasked the Energy minister Goretti Kitutu and Uganda National Oil Company (Unoc) team to return on Monday with a set of agreements relating to EACOP to inform decision on the loan request.
The documents requested for included drafts of, the Inter-Government Agreement (IGA), the Host Government Agreement (HGA), shareholders agreement, tariff agreement, and transportation agreement, for commercialisation of EACOP.
Both the junior Finance minister David Bahati and Ms Kitutu had wanted the loan request expedited, ahead of next Monday’s meeting between executives from Total SA, the parent of Total E&P, the lead developer of the pipeline, and teams from Uganda led by President Museveni and Tanzania led by Vice President Suluhu Hassan to initial the Shareholders and Tariff Agreements, respectively, to pave way for Final Investment Decision (FID).
However, Ms Bbumba wondered whether “there is evidence this loan request is conditioned to FID?”
“Let us meet here on Monday at 8:30am for a discussion for about two hours, then you can head to State House,” she said. During the committee sitting yesterday, Ms Kitutu and the Unoc chief executive officer, Ms Proscovia Nabbanja deflected the MPs’ opposition towards what they called the continued sinking of money in oil investments without significant returns.
Ms Kitutu argued that the loan request is to fulfil government’s financial commitment towards EACOP and is a precondition to FID, which officials say will be announced soon.
The tentative shareholding structure for EACOP is currently; both Total E&P and Cnooc each taking a 37.5 percent stake, UNOC taking 15 per cent, and Tanzania through its national oil company— Tanzania Petroleum Development Corporation (TPDC) taking a 5 per cent stake. [email protected]
