Tanzania pays $80m for stake in EA oil deal

By Alex Nelson Malanga

Dar es Salaam. Tanzania has already disbursed some $80 million (about 184 billion shillings) as part of its commitment to fund the East African Crude Oil Pipeline (EACOP), The Citizen has learned.
The managing director of the Tanzania Petroleum Development Corporation (TPDC), Mr. James Mataragio, said the parastatal oil company is expected to pay a total of $308 million (about 708.4 billion shillings) over the construction period. covering the next three years.
The cost of the project, he said, which is estimated at $3.5 billion (about 8.1 trillion shillings), would be 40% funded by equity from the four shareholders, while 60% would come from loans from international lenders.
According to the shareholders’ agreement, TPDC and Uganda National Oil Company each hold 15% of the shares, while China National Offshore Oil Corporation (CNOOC) holds 8% and France’s TotalEnergies 62%.
Dr Mataragio said he paid his first call for funds for the 1,445 km project immediately after the announcement of the Final Investment Decision (FID) for the vast regional oil pipeline in Kampala on Tuesday this week.
“We will have to pay for the 15% stake in the equity fund,” Dr Mataragio revealed to the Citizen yesterday.
He added: “We will pay one cash call each month until the project is completed. The amount payable each month will be determined by the size of activities in a given month.
EACOP’s FID was announced at a ceremony in Kampala by the bosses of France’s TotalEnergies and the China National Offshore Oil Corporation (CNOOC).
Dr Mataragio said the FID announcement was a crucial step towards the implementation of the project which is expected to generate more than 10,000 jobs.
“With the announcement of FID, we are ready to start physical activities as EACOP can now announce the award of tenders to provide raw materials to power the project,” he hinted. .
Dr. Mataragio further explained that initially the announcement of auctions was put on hold as the company to handle the case had not yet been formed.
Now, he said, the company dubbed EACOP has been formed with management and the board.
The UK-headquartered company has branches in Tanzania and Uganda.
“We need to prepare for the opportunities offered by EACOP so that we don’t just sit back and watch others enjoy them,” noted Dr Mataragio.
The executive director of the Tanzania Private Sector Foundation (TPSF), Francis Nanai, told The Citizen that local businesses have what it takes to tap into the opportunities in their path.
However, for this to happen, he urged local businesses to form joint ventures to enable them to thrive.
“We need joint ventures if we want to have strong enough financial muscles to offer equipment during the construction period,” Nanai recommended.
Adding, “We need skilled labor and technology for local businesses to deliver products and services that meet international standards.”
TPSF applauded the local content regulations, which paved the way for Tanzanians to participate in 12 projects.
Closed sub-projects include transportation, food and beverage supply, hotel accommodation and catering, office supplies, surveying, lifting equipment, locally available building materials, civilian personnel , communication services and waste management.

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