Japanese bank follows StanChart, disowns EACOP role

Protests around the world on February 22, 2023, putting pressure on financiers to abandon the EACOP plan. (Image: StopEACOP)

Sumitomo Mitsui Banking Corp. (SMBC) – a Japanese financial institution, will not fund the controversial East African Crude Oil Pipeline (EACOP), following Standard Chartered Bank’s similar rejection.

Bloomberg reported SMBC Chief Sustainability Officer, Mr Masayuki Takanashi, as saying the bank was “not currently involved” at a media briefing in Tokyo.

SMBC has acted as financial advisor of the pipeline project, which will run from Uganda’s west in Hoima district, Bunyoro region to the Tanzanian port of Tanga.

The StopEACOP group welcomed the announcement saying SMBC’s withdrawal is a “particularly stark warning that the EACOP project is too risky, and financial institutions should disassociate themselves from this controversial pipeline.”

The NGO called on EACOP’s other two financial advisors, Standard Bank and the International Commercial Bank of China (ICBC), to drop the project.

Uganda Energy and Mineral Development Minister, Dr Ruth Nankabirwa, said last week EACOP would need about $1.8 billion of debt.

The total cost is around $3.5-4bn, with shareholders providing the outstanding financing.

The minister said the Export-Import Bank of China would provide some of the debt needed for EACOP.

BankTrack researcher, Mr Henrieke Butijn, noted SMBC had provided financial advice to TotalEnergies and joint arranger for the EACOP loan.

“As the risks of financing the EACOP become increasingly clear, we hope this news will set an example for SMBC’s Japanese peers, including MUFG, and all other financial institutions that have not yet publicly ruled out support,” Mr Butijn said.

A licence round is currently under way in Congo, Kinshasa.

A number of blocks are available in the Congo’s east, with recent talk suggesting exports could take place via EACOP.


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