By Witness Radio Team
The StopEACOP Coalition has issued a warning to shareholders and bondholders of TotalEnergies and China National Offshore Oil Corporation (CNOOC), urging them to reconsider their funding of the East African Crude Oil Pipeline (EACOP) due to the companies’ growing self-financing of the project that exposes shareholders and bondholders to gross financial and reputational risks.
In a public statement released alongside its Finance Risk Briefing Update No. 6, the coalition revealed that the two energy giants have quietly decided to increase their financial commitments to the $5.6 billion pipeline, stepping in as lenders to their own project. This move reflects the collapse of external financing for EACOP amid widespread rejection by international banks and insurers due to the project’s environmental, human rights, and climate risks. These risks include environmental, human rights concerns, and climate-related issues.
According to EACOP Limited’s 2024 annual report, TotalEnergies and CNOOC have provided additional facilities through shareholder loans to fund what remains of the construction budget.
Initially projected to cost up to $3.5 billion and intended to be financed with 40% equity and 60% debt, the project’s cost has since increased to a whopping $5.6 billion. The two companies have already injected roughly $2.8 billion in equity and secured around $755 million in external loans, leaving a debt gap of approximately $2 billion. Currently, TotalEnergies and CNOOC are moving to cover that shortfall themselves, bringing their total funding to about $4.8 billion, or 86% of the project’s total cost, more than triple what they had initially planned to use.
“This is a shocking example of developers financing their own controversial project after being rejected by global financial institutions. It shows that the EACOP is no longer financially viable without corporate self-funding and that investors in these companies are now directly financing one of the most destructive fossil fuel projects in the world,” Reads part of the statement.
The coalition argues that by turning inward for financing, TotalEnergies and CNOOC have transferred financial, legal, and reputational risks to their own shareholders and bondholders.
“Now, to keep the project alive, TotalEnergies and CNOOC are turning inward, relying on their own balance sheets and, by extension, your capital. The situation increases your financial risk, deepens your exposure to the project’s growing controversy, and links your investment portfolios even more directly to the environmental destruction, human rights abuses, and climate chaos that EACOP represents,” the statement says.
“This means that institutional investors holding TotalEnergies or CNOOC securities are now directly linked to the project’s growing controversies, from land grabs and community displacement to the threat it poses to climate goals.”
EACOP is a 1,443-kilometer pipeline stretching from Uganda’s Lake Albert oilfields to the Tanzanian coast, which has faced heavy opposition since its inception. This opposition is due to threats to biodiversity and the environment, as well as to people’s displacement among others.
It is from this that the STOPEACOP coalition is calling for active engagement with TotalEnergies and CNOOC to jointly address human rights and environmental risks and identify a time-bound escalation strategy, where investors publicly set deadlines for the companies to act, backed by credible consequences such as voting against board members or divesting from the companies altogether.
“We are therefore calling upon the shareholders and bondholders of TotalEnergies and CNOOC to act with integrity and foresight, in line with their responsibilities under the UNGPs and the OECD Guidelines, to avoid contributing to severe human rights and environmental impacts associated with the operations of your portfolio companies,” reads the statement.
In the last three years, over 20 major banks and 23 insurers have publicly ruled out support for the EACOP project, citing misalignment with global climate targets and reputational concerns.
The Finance Risk Briefing shows that 43 banks have ruled out financing for the 1,443 km pipeline since the project began.
Governments and international organizations have also faced mounting pressure to intervene, as civil society movements in Uganda, Tanzania, and abroad intensify opposition to its implementation due to its adverse effects.
