Tanzania: Sh2.3bn AfDB Grant for SMEs Involved in Oil Pipeline Project

Summary

• The money will be channelled to the micro, small and medium enterprises roped in the $3.5 billion project to start early next year

By Zephania Ubwani and Agencies

Arusha — The African Development Bank (AfDB) has granted $1 million (Sh2.3 billion) to the

East African Crude Oil Pipeline (Eacop) project. Out of the money, $500,000 goes to Uganda while the other $500,000 goes to Tanzania.

The money will be channelled to the micro, small and medium enterprises (MSMEs) roped in the $3.5 billion project to start early next year.

"The overall objective is to help develop the capacity of local enterprises in Uganda," said a statement from the pan African bank based in Abidjan.

The grant will enable the small firms access the new market opportunities and build linkages with larger, national, regional and international companies.

The project aims to support inclusive private sector growth and the creation of an estimated 500 jobs along the Uganda portion of the pipeline.

According to AfDB, while the bank will contribute $500,000 as grant, the Uganda government through petroleum body will provide counterpart funding.

"A similar project is being finalized on the Tanzanian side of the border," the statement added, noting that the assistance followed requests from the two countries. The construction of the 1,447-kilometre pipeline from Hoima in western Uganda to the Tanga port will cost $3.5 million.

"The target is to have at least 100 local micro businesses in Tanzania and Uganda trained to do business on the pipeline project," the statement added.

It is also expected to link at least 70 business enterprises or other relevant businesses transactions undertaken on the pipeline.

Late last month Tanzania and Total Oil Company signed an agreement that will pave the way for the construction of a crude oil pipeline.

Attorney General Adelardus Kilangi signed the Host Government Agreement (HGA) for the Tanzania government while Nicolas Terraz penned for Total oil giant.

The signing followed three weeks of intensive negotiations between the senior government technocrats led by the AG and executives from Total, the French oil giant.

The pipeline will be used for transportation of crude oil from Hoima in Uganda to the Tanga port for export overseas.