Tanzania-Uganda's oil and pipeline projects to top this year's infrastructure transactions in the region

Tanzania-Uganda's oil and pipeline projects to top this year's infrastructure transactions in the region

A new report shows that Tanzania and Uganda top EA's oil and pipeline project funding needs this year as the two countries seeking over $7 billion funding for the said project.

According to Debtwire's Africa Project Finance Trend update for 2019, the oil and infrastructure sectors are the most probably to attract interest from investors and financiers this year.

Tanzania is regarded as likely to top the infrastructure transactions with the $3.5 billion joint East Africa Crude Oil Pipeline project.

Whereas, Stanbic Bank Uganda, the main arranger for a $2.5 billion loan, said that it expects the deal to be over in June 2019.

While the balance of $1 billion is likely to come from shareholders in the form of equity.

According to the financial deal, In November 2018, Uganda declared that it expected to have a decisive financial deal for the joint pipeline with Tanzania by mid-2019, paving the way for its construction after months of delays that have seen Kampala amended its oil production timelines.


Last week, Energy Minister Irene Muloni made a reference to the fact that production is most probably expected to start in 2022, a slight delay from the amended date of 2021.

"We are now looking at 2022, for our first production from the Kingfisher and Tilenga blocks," Ms Muloni told Reuters on the sidelines of the Petrotech conference in New Delhi, India.

China's CNOOC and France's Total and Tullow Oil have stakes in the two areas. CNOOC is the operator of Kingfisher block while Total heads the exploration in Tilenga.

"We are arranging for production. We have to build a pipeline for exports and a refinery to add value. So unless and until those two projects are completed we cannot start production," said Ms Muloni.

In April 2018, Uganda signed a deal with a consortium, including a supplementary of General Electric, to build and operate a 60,000 barrel per day refinery that will cost between $3 billion and $4 billion. The refinery is likely to be operational by 2023.

The crude export pipeline through Tanzania, with a capability to transport 260,000 barrels a day, will be built by 2022, the minister said.

Beyond the oil and gas sector, Tanzania expects to close the $3.5 billion financing deal for the construction of 1,057 kilometres of railway, being the second stage of the 2,561km standard gauge railway project.

Uganda too will, in the first quarter of this year, issue a appeal for proposals for $1.5 billion financing of the 95km the Kampala-Jinja highway project is to be built under a public-private-partnership with the Ugandan government injecting $400 million.

Kenya is expected to table a road brownfield project to improve more than 100km between Nairobi and Magadi, south of the capital, for $500 million, as it also expects some development on the second Nyali bridge project in Mombasa.