{"id":66335,"date":"2024-02-05T18:53:03","date_gmt":"2024-02-05T18:53:03","guid":{"rendered":"https:\/\/www.africa-press.net\/uganda\/?p=66335"},"modified":"2024-02-05T18:53:03","modified_gmt":"2024-02-05T18:53:03","slug":"eacop-faces-fresh-hurdles-as-insurance-firms-stay-away","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/uganda\/all-news\/eacop-faces-fresh-hurdles-as-insurance-firms-stay-away","title":{"rendered":"Eacop faces fresh hurdles as insurance firms stay away"},"content":{"rendered":"

Africa-Press – Uganda. <\/strong><\/span>Several insurance companies have opted out of insuring the East African Crude Oil Pipeline (Eacop), adding to the project\u2019s unending woes that have delayed construction for four years.<\/b><\/p>\n

A total of 28 insurers have so far declared they will not insure Eacop following pressure from climate activists, who argue that the project poses significant pollution and human rights risks. However, AIG, Tokio Marine, Chaucer and Hiscox are still willing to insure the project.<\/p>\n

Last week, SiriusPoint, Riverstone International, Enstar Group, and specialty insurers Blenheim and SA Meacock all ruled out insuring the transboundary project.<\/p>\n

Riverstone International said in a statement that it \u201cdoes not underwrite the Eacop project directly or indirectly, and nor does it intend to.\u201d<\/p>\n

SiriusPoint said it was \u201cnot participating in the Eacop tender\u201d while Enstar, Blenheim and SA Meacock offered equally clear statements.<\/p>\n

\u201cThese decisions come after months of targeted efforts by environmental organisations, including Coal Action Network, Insure Our Future and StopEACOP, to hold insurance firms accountable for their involvement in dirty energy projects that endanger local communities and pollute vital ecosystems.<\/p>\n

\u201cPressure will now grow on remaining insurers, including AIG, Tokio Marine, Chaucer and Hiscox, to rule out involvement in the pipeline,\u201d 350.org, a global grassroots climate change movement, said in a statement.<\/p>\n

\u201cWhat will they choose at this crucial moment? Short-term profits from dirty energy, leading to increasingly violent wildfires, floods and rising food prices? Or the safe, healthy world we all want for our loved ones? We need companies to make the right choice now,\u201d said Will Attenborough of Coal Action Network.<\/p>\n

Experts say this leaves the project hanging in the balance because local insurers cannot cover more than 30 percent of the insurance needed for the project.<\/p>\n

According to Dickens Kamugisha, executive director of the Kampala-based Africa Institute for Energy Governance (Afiego), the Ugandan government is likely to lower its standards and offer attractive terms because it\u2019s heavily indebted.<\/p>\n

\u201cThe government currently has over $25 billion in debts, 80 percent of which has been accumulated during the time when it\u2019s been pursuing these oil projects. The government is now desperate that it is likely that it will lower its expectations to attract investors,\u201d Mr Kamugisha said.<\/p>\n

The 1,443-kilometre pipeline from Hoima in western Uganda to the Tanzanian Indian Ocean port of Tanga, is majority-owned (62 percent) by French oil giant TotalEnergies and state oil companies of China, Uganda and Tanzania.<\/p>\n

Eacop is planned to pass through areas of sensitive ecological importance, including national parks and wildlife reserves. There has been criticism from international environmentalists, but the Uganda National Oil Company chief legal and corporate affairs officer Peter Mulisa has allayed fears of the citizens of Uganda and Tanzania where the pipeline is passing, that all safety measures have been taken.<\/p>\n

Western banks have recoiled from the project, while Chinese lenders, promising $3.5 billion, are still holding out on a final decision, which could potentially lead to delays.<\/p>\n

Away from environmental concerns, the economic viability of the Eacop is also in question. The project is reliant on international oil prices, which are volatile. With the current global shift towards renewable energy sources, there is a real risk that the demand for crude oil could decline in the coming years, making the Eacop project economically unfeasible.<\/p>\n

\u201cThe Ugandan oil projects are failing to attract international financing because these financial institutions know that the projects are not economically viable now that the world is moving away from fossil fuels to green energy. No sensible financial institution can invest in such projects,\u201d Mr Kamugisha said.<\/p>\n

At the recent COP28 in Dubai, nations acknowledged the necessity of transitioning from fossil fuels and the importance of financial institutions investing in clean energy solutions.<\/p>\n

Building on that momentum, environmentalists aver that the insurance and banking industries must take responsibility to avoid involvement in fossil fuel projects and help steer the world towards a safe, healthy and just future.<\/p>\n

According to Afiego\u2019s Kamugisha, oil projects in Africa never benefit citizens as governments claim.<\/p>\n

\u201cWe need to invest in cleaner energy that can also easily reach the citizens,\u201d he said.<\/p>\n

Angela Ambaho, head of corporate affairs at the Uganda National Oil Company said the project is \u201cnot struggling because we are already laying the pipeline.\u201d<\/p>\n

In November last year, Eacop commenced above-ground installations in bother Tanzania and Uganda, with a target of completing the project by December 2025.<\/p>\n

Source: Monitor<\/b><\/p>\n

For More News And Analysis About Uganda<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Uganda. Several insurance companies have opted out of insuring the East African Crude Oil Pipeline (Eacop), adding to the project\u2019s unending woes that have delayed construction for four years. 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Several insurance companies have opted out of insuring the East African Crude Oil Pipeline (Eacop), adding to the project\u2019s unending woes that have delayed construction for four years. 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