The East African Crude Oil Pipeline (EACOP) project has suffered a significant setback as 28 insurance companies opted out of providing coverage, citing pressure from climate activists and concerns about environmental and human rights risks.
This exodus leaves the project's financial viability in question, as experts say local insurers cannot cover more than 30% of the required insurance. With construction already delayed by four years, this latest obstacle could further stall progress.
A total of 28 insurers, including SiriusPoint, Riverstone International, and Enstar Group, have publicly declared their refusal to participate in the project. This follows months of campaigning by environmental groups like Coal Action Network and Insure Our Future, who argue that Eacop poses dangers to local communities and vital ecosystems.
"These decisions come after months of targeted efforts... to hold insurance firms accountable for their involvement in dirty energy projects," said 350.org in a statement, urging remaining insurers like AIG and Tokio Marine to follow suit.
Experts like Dickens Kamugisha, director of the Africa Institute for Energy Governance, believe the Ugandan government may be forced to lower its standards and offer attractive terms to attract new insurers. "The government is desperate... it is likely that it will lower its expectations," he said.
The 1,443-kilometer pipeline, majority-owned by TotalEnergies and state oil companies, aims to transport oil from Uganda to Tanzania's Indian Ocean coast.
Despite commencing above-ground installations in November 2023, the project's target completion date of December 2025 now appears increasingly uncertain.