The European Investment Bank has committed to end funding for coal, oil and gas projects by 2021.
Under the bank’s new policy, energy projects applying for EIB funding will need to show they can produce one kilowatt hour of energy while emitting less than 250g of carbon dioxide, effectively disqualifying traditional gas-burning power plants.
“They have set a new global standard. All other banks, private and public, must follow suit. Cutting funding for polluting fossil fuel projects and switching to clean renewable energy is the least we must do to address this crisis,” said Manuel Pulgar-Vidal, leader of the World Wildlife Fund’s global climate and energy practice.
The decision comes at a time when the construction of the East African Crude Oil Pipeline (EACOP) is facing funding challenges after private oil firms stopped the project due to a tax dispute with the Ugandan government.
Uganda and Tanzania have opened discussions with the African Development Bank (AfDB) for partial financing of construction of the crude oil pipeline between the two countries after private oil giants—Tullow Oil and Total SA—pulled out of the deal about three months ago.
The EastAfrican has learnt that Uganda and Tanzania are in talks with the AfDB for an estimated $1.8 million grant, with hopes of reviving the project that is critical to the commercial production of Uganda’s crude oil reserves that were discovered 13 years ago.
“This project was cancelled for non-performance. A request for grant funding under Nepad-IPPF [Nepad Infrastructure Project Preparation Facility] special fund has been received to resuscitate the project. Request currently under consideration,” states the project status report by the EAC Secretariat, seen by The EastAfrican.
The AfDB, through its Nepad-IPPF Special Fund, offers financial assistance to African countries, Regional Economic Communities, specialised agencies and related institutions by providing grants for developing high quality and viable regional and continental infrastructure projects.
The grant resources put recipient countries in prime positions to solicit for additional funding from public and private sources.
AfDB’s manager in-charge of Infrastructure and Partnerships Division Mike Salawou did not respond to our e-mailed questions by the time of going to press.
Uganda’s Energy Minister Irene Muloni, earlier this month said the government had already offered a solution to the tax dispute and that she was optimistic that the oil firms would make their final investment decisions on the project by the end of March next year, paving the way for the first oil to pass through the pipeline by 2023.