By Nneka Nwogwugwu
Standard Bank has shown commitment in considering financing the East African Crude Oil Pipeline project.
Standard Bank says its participation is subject to findings of environmental and social due diligence assessments.
The project is a collaboration between Total and China National Offshore Oil Corporation, and will export oil from Uganda to Tanzania.
The project known as the East African Crude Oil Pipeline (EACOP) is a collaboration between French energy company TotalEnergies, the China National Offshore Oil Corporation (CNOOC) as well as the Uganda National Oil Company (UNOC) and Tanzania Petroleum Development Corporation (TPDC).
It spans 1 443km and will be used to transport crude oil from Uganda to Tanzania for export.
However, an alliance of activists known as #StopEACOP has warned that the pipeline would displace communities and have a severe impact on climate and wildlife. The alliance is made up of organisations such as human rights and environmental lawyers Natural Justice, environmental activists 350Africa.org and activist shareholder group JustShare.
In response to questions from Fin24 about its involvement in the EACOP, Standard Bank said its participation in the funding of the project “remains subject to the findings of environmental and social due diligence assessments,” as well as it meeting the Equator Principles requirements. The Equator Principles are the financial industry benchmark for assessing and managing Environmental and Social (E&S) risks in projects.
Standard Bank explained that the Equator Principles Project Finance deals are subject to due diligence assessments that inform decision-making and cover various areas such as legal, technical, security, market as well as environment and social risks.
Robyn Hugo, director of climate engagement at JustShare highlighted that Standard Bank’s current fossil fuel financing policy does not include “ambitious financing exclusions”.
“A credible assessment that is truly aligned with the Paris goals, would exclude the provision of finance to this highly-destructive project,” said Hugo.
Furthermore, the bank’s involvement is subject to a “full assessment” of the EACOP sponsors’ climate change strategies and targets.
Standard Bank said it is committed to “maximising opportunities” for sustainable and inclusive growth, while managing the risks posed by climate change. The bank will publish its climate change targets at the end of the first quarter.