How regional tensions killed $400m EA oil pipeline plan

Arusha. With the East African Community (EAC) bloc aiming to become self- sufficient in energy resources, an oil pipeline project has been ditched due to political differences.

A 220km pipeline from Kigali, Rwanda to Bujumbura, Burundi and associated structures was to cost $400 million but was shelved in 2019 due to unfavourable geopolitics of the time.

This was revealed yesterday during tabling of the EAC Report on Accounts for the year ending June 30, 2019 before the East African Legislative Assembly (Eala).

As the two neighbouring countries dithered on its implementation, the African Development Bank (AfDB) cancelled the grant and closed the project account in August, 2019.

“The regional geopolitics did not favour the project as the Republic of Burundi officially pulled out of it,” said the report as it was tabled to the first House session this year.

Construction of the pipeline is among major energy projects mulled and designed by the EAC in order to ease transportation of petroleum products to its land-locked members.

Feasibility study was signed way back in 2016 between NEPAD-Infrastructure Projects Preparation Facility (NEPAD-IPPF) and the EAC Secretariat.

The $400 million project includes construction of mainline pumps, intermediate pump stations, storage terminals and laying of a pipeline connecting the two capital cities.

The grant amount for the feasibility study was $601,281 and was to start the same day it was signed (August 17, 2016) and close on December 31 the same year.

The bank account for the project was opened on September 5th, 2016 and the first tranche of funds worth $51,150 was thereafter received for a series of technical meetings.

However, the ambitious project hit a brick wall only months later when technical workshops for the experts in the steering committee failed to take place in 2017 as planned.

On December 13, 2017, the AfDB cancelled the grant agreement and recalled the disbursed amount of $51,150 from the EAC secretariat in June 2019.

The 204-page report for EAC Audited Accounts obtained by The Citizen said the project was marred by problems from its inception due to “communication breakdown between EAC and AfDB.

The administrative procurement was “too long” and at every stage a “no objection” was required from the bank.

However, the collapse is largely attributed to political differences between Rwanda and Burundi during the period which saw the closure of the common border for years.

It was Burundi, which was then in political turmoil which officially called for a halt to the project as it pulled out, insisting “regional geopolitics” did not favour its implementation.

The report said failure to implement it denied the EAC potential benefits besides negatively affecting future funding from the donors of the Community.

The Accounts Committee members recommended to the EAC management to always ensure proper feasibility study was done before similar projects are rolled out “to ensure effective and timely implementation”.