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China-Africa relations
ChinaDiplomacy

What has driven China to bankroll controversial Ugandan crude oil pipeline?

  • Chinese leader Xi Jinping has extended ‘unwavering support’ for East African Crude Oil Pipeline, according to Ugandan President Yoweri Museveni
  • Project lets Beijing portray itself as the more reliable development partner after Western investors backed out, observer says

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China has stepped in to bankroll the controversial East African Crude Oil Pipeline (EACOP) project. Photo: Handout
Jevans Nyabiage
China has stepped in to bankroll the building of a controversial oil pipeline in Uganda as Western-backed lenders abandoned the project. But the move is driven “more by geopolitics than by geoeconomics”, according to observers.
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The assessment follows Ugandan President Yoweri Museveni’s revelation earlier this month that his Chinese counterpart, Xi Jinping, had promised his “unwavering support” for the construction of the East African Crude Oil Pipeline (EACOP), set to run from Uganda’s Lake Albert oilfields to the port of Tanga in Tanzania.

“I received a letter from President Xi Jinping of China expressing his support for the EACOP project. I welcome His Excellency’s support and invitation to the energy minister to visit China for further discussions with his government,” Museveni said on April 4.

The letter was hand-delivered by Xue Bing, China’s special envoy for the Horn of Africa, and read by the Chinese ambassador to Uganda, Zhang Lizhong.

Uganda discovered oil in the Lake Albert basin on its border with the Democratic Republic of the Congo nearly two decades ago, but it was not until 2022 that a final investment decision was reached to tap into the resource.

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At first, dozens of Western banks and insurers expressed interest in financing the pipeline. But amid growing opposition from environmental and human rights groups, they all backed out of the project.
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