World Bank arm to give $600 million for regional oil pipeline

Workers lay down a pipeline in Eldoret. The International Finance Corporation has pledged Sh54bn for 1,300km of pipeline connecting Kenya, Uganda and South Sudan. FILE PHOTO | JARED NYATAYA |  NATION MEDIA GROUP

By GEOFFREY IRUNGU, Business Daily

In Summary

• Funding part of a $1.8 billion loan for projects in the Horn of Africa.
• The financing targets 1,300 kilometres but the whole pipeline project is estimated to cost $5 billion to complete.
• The funds made available by the IFC are also intended to support renewable energy projects such as wind energy and access to markets.

A World Bank arm has pledged $600 million to fund an oil pipeline linking upstream operations of Kenya, Uganda and South Sudan.

The funding by the International Finance Corporation (IFC), the private sector lending and investment arm of the World Bank, is part of a $1.8 billion loan for projects in the Horn of Africa.

“IFC investments under the new Horn Initiative will include a regional pipeline linking Uganda and Kenya, greater investments in agribusiness expansion in storage, processing and seeds,” said a statement by the bank.

The World Bank president Jim Yong Kim and UN secretary-general Ban Ki-Moon are set to visit Kenya Wednesday.

The financing targets 1,300 kilometres but the whole pipeline project is estimated to cost $5 billion to complete.

From Eldoret to Kampala, a distance of about 350 kilometres, the pipeline is expected to cost not less than $302 million, according to one estimate. The current pipeline in Kenya reaches Eldoret.

The proposed project also involves the section between Kampala and Kigali, a length of 434 kilometres, that is not under the $600 million financing.

The tender for the pipeline was advertised last month by the three governments. It called for a contractor with both local and international experience.

READ: Kenya, Uganda, Rwanda close to picking consultant for pipeline

The contract for the successful bidder will involve the procurement, construction, testing and commissioning of the pipeline.

The venture is expected to be completed in three years and will serve several countries including DR Congo, Burundi and South Sudan.

The funds made available by the IFC are also intended to support renewable energy projects such as wind energy and access to markets.