Standard Bank Seeks to Raise $3 Billion for Ugandan Oil Pipeline

(Bloomberg) -- Standard Bank Group Ltd.’s Ugandan unit plans to raise $3 billion for a crude pipeline by the second half of next year as the East African country prepares to start oil production by 2020.

Stanbic Bank Uganda was appointed alongside Japan’s Sumitomo Mitsui Banking Corp. as joint financial adviser for the 1,445-kilometer (898-mile) pipeline, Patrick Mweheire, the chief executive officer of the Kampala, Uganda-based business, said in an interview on Tuesday. The companies will explore raising bank debt or loans from export credit agencies among the options they are considering, he said, without giving more details.

The pipeline will connect Uganda’s Hoima oilfields in the west to the port of Tanga in neighboring Tanzania. Ugandan President Yoweri Museveni and his Tanzanian counterpart John Magufuli commissioned the construction of the $3.5 billion pipeline earlier this month. France’s Total SA, China’s Cnooc Ltd. and London-based Tullow Oil Plc are jointly developing the country’s oil finds.

“A lot of activities are going on, a lot of tenders are being made” and expectations are that the final investment decision for the project will be made in the first quarter of next year, Mweheire said. Fundraising for the project won’t cause “any currency mismatch” because borrowing can be done in dollars, he said.

To contact the reporter on this story: Fred Ojambo in Kampala at fojambo@bloomberg.net. To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net Vernon Wessels, John Viljoen.

Copyright 2017 Bloomberg News.

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