Japanese lender Sumitomo Mitsui Financial Group (SMBC) has distanced itself from financing Uganda’s East Africa Crude Oil Pipeline (Eacop), which has been criticized by climate activists for the possible negative impacts it’ll have on local communities and the environment.
The $5 billion oil project, which is touted to be the world’s longest electrically-heated pipeline, is planned to transport crude oil from western Uganda to the Tanzanian port of Tanga – covering a distance of 1,443 kilometres.
Masayuki Takanashi, the Japanese bank’s chief sustainability officer, told a media briefing on Tuesday that SMBC is “not currently involved” in the project, joining an ever-increasing list of financial firms that have ruled out financing Eacop.
There were unconfirmed reports that SMBC Group’s affiliate Sumitomo Mitsui Banking Corporation had not only provided a large amount of funds to French oil giant TotalEnergies, Eacop’s principal developer, but was also reportedly serving as a financial advisor on Eacop.
“It is encouraging that more and more institutions, including Sumitomo Mitsui Financial Group recognise the impacts of EACOP on local communities, wildlife, sensitive ecosystems and the climate and are choosing to distance themselves from it,” said Charity Migwi, the regional campaigner at 350Africa.org, a global grassroots green energy advocacy nonprofit.
She went on: “This is a testament to the power of the voices of communities and activists that have persisted in resisting this harmful project. It’s critical that we cut off financing to fossil fuels projects which are fuelling the climate crisis, causing untold devastation to our communities and instead invest in safe, reliable, sustainable and community-centred renewable energy.”
To date, civil society around the world, including in Africa, has repeatedly inquired as to whether or not SMBC is involved in Eacop, and have taken simultaneous global actions to demand that SMBC state that it is not involved in the project.
However, until yesterday, there had been no response from the side of SMBC Group or SMBC distancing itself from Eacop. At yesterday’s press briefing, they only stated that they are not “currently involved” with Eacop, and it remains unclear if or what kind of involvement they have had with Eacop – and whether the lender will be involved in future.
“Sumitomo Mitsui Financial Group’s (SMBC Group) explanation that it is not currently involved in the East Africa Crude Oil Pipeline (EACOP) has brought some relief to African and global citizens suffering from the climate crisis. SMBC Group and SMBC should make it clear that they will never be involved in EACOP in the future,” said Masayoshi Iyoda, Team Leader of 350.org Japan.
“With this news, Mitsubishi UFJ Bank is the only one of the three Japanese mega banks that has not explained its status of involvement in EACOP. Mitsubishi UFJ Bank should also issue a statement on whether it is not involved in EACOP. The three mega banks should do what they can before the June shareholders’ meeting: stop supporting fossil fuel businesses like EACOP and strengthen their climate policies to be consistent with the 1.5°C target of the Paris Agreement,” Iyoda added.
Campaigners argue that the project threatens East African water resources and livelihoods of millions of people, and that it is poised to destroy some of the world’s most important nature reserves, including Uganda’s famous Murchison Falls National Park.
It’s also envisaged that, at peak production, Eacop could emit about 34 million tonnes of CO2 each year. Uganda plans to start commercial oil production in 2025, and oil drilling has already started.
