Standard Bank Urged to Reject Controversial East Africa Pipeline Amid Growing Concerns

Published by
WIlliam Dube
  1. Standard Bank is facing mounting pressure to decide on its involvement in the controversial East Africa Crude Oil Pipeline (EACOP) project, as 25 major banks, including Standard Chartered, have publicly refused to finance it.
  2. Activist groups such as #StopEACOP warn of potential negative impacts of the pipeline on communities, water resources, wetlands, and wildlife, and argue that it does not align with climate goals to reduce emissions.
  3. While some believe that Standard Bank’s association with the project exposes it to reputational risks, others argue that clearly communicating their position and ensuring responsible financing could mitigate these risks. Standard Bank’s management is currently reviewing findings from an environmental and social due diligence assessment before making a final decision.

As Standard Chartered Bank recently declared its decision to not fund the controversial East Africa Crude Oil Pipeline (EACOP), Standard Bank, a financial advisor for the project, is experiencing mounting pressure to terminate its involvement. With 25 major banks, including Standard Chartered, publicly refusing to finance the project, the focus has shifted to Standard Bank, which has yet to make a decision on the matter.

The EACOP project, spanning 1,443 kilometers between Uganda and Tanzania, has TotalEnergies as its majority stakeholder with a 62% share. Other stakeholders include Uganda National Oil Company (15%), Tanzania Petroleum Development Corporation (15%), and China National Offshore Oil Corporation (8%). The pipeline has faced opposition from an alliance of activists, #StopEACOP, who warn of potential negative impacts such as displacing thousands of families and farmers, endangering water resources and wetlands, and threatening wildlife, as it runs through several nature reserves.

Furthermore, StopEACOP emphasizes that the pipeline is not in line with climate goals to reduce emissions. While South African banks such as Firstrand, Absa, Nedbank, and Investec have ruled out financing the project, Standard Bank continues to consider its involvement. As one of the three primary financial advisors for the project, Standard Bank’s decision regarding the $5 billion project remains uncertain.

Following Standard Chartered’s recent decision, which was revealed in a Bloomberg interview, Robyn Hugo, director of climate change engagement at shareholder activist group Just Share, believes that there is now additional pressure on Standard Bank to make a similar decision. Standard Chartered’s move is significant as it serves as the chair of the Equator Principles, an industry benchmark that banks and financial institutions utilize in assessing the environmental and social risks of the projects they plan to invest in. These principles encourage investments in projects that are socially responsible and have sound environmental management practices.

Standard Chartered’s decision to withdraw after evaluating the project against the Equator Principles demonstrates that the pipeline does not meet the required international standards, according to a statement from StopEACOP. Hugo noted that Standard Chartered’s decision leaves Standard Bank increasingly isolated as a lead financial advisor to the EACOP.

Standard Bank has faced pressure to make a decision in the past, with environmental activists like Extinction Rebellion protesting outside its offices during last year’s annual general meeting. In 2022, Standard Bank and public relations firm Edelman parted ways following a disagreement over work on the EACOP. Although Edelman and Standard Bank did not disclose why they did not renew their contract, sources familiar with the matter claim it is because Edelman did not want to provide public relations or reputation management services specifically for the EACOP.

Standard Bank stated that it is relying on findings from an independent environmental and social consultant who conducted a due diligence assessment on the project. The environmental and social (E&S) due diligence report has been completed and shared with lenders. Standard Bank’s final assessment and subsequent decision will follow the project’s timeframes as internal experts review the findings of the report.

Several processes are underway and need to be concluded before a final decision can be made. Standard Bank’s participation in the funding of the EACOP project remains subject to its credit approval process, which includes consideration of the findings of the E&S due diligence assessments and meeting the Equator Principles requirements. The bank also stated that its decision is subject to a full assessment of the EACOP sponsors’ climate change strategies and targets.

Standard Bank reaffirmed its commitment to maximizing opportunities for sustainable and inclusive growth across the continent and managing the risks posed by climate change.

. However, Hugo suggested that Standard Bank may face reputational risk due to its links to the EACOP. “Refusing to distance itself from this enormously controversial project exposes Standard Bank to severe financial and reputational risks,” said Hugo.

Kokkie Kooyman, analyst and executive director at Denker Capital, disagrees with the notion of reputational risk, particularly if Standard Bank communicates its position clearly. Kooyman believes that Standard Bank is attempting to ensure that the transaction (financing the pipeline) serves the needs of the community. “Standard Bank is trying to make sure they have weighed up all the facts and make sure it is responsible to do this transaction,” said Kooyman.

“If they can explain this transaction is responsibly done, and they have weighed up all the facts, which I am sure they are doing, I think the majority of investors will understand it,” he added. Kooyman noted that if Standard Bank does finance the pipeline, it may receive a lower Environmental, Social, and Governance rating. However, he does not believe this would be a significant issue for South African investors or clients, who are more concerned about corruption. “Those things weigh much heavier on investors’ minds,” he said.

Kooyman concurs that Standard Chartered’s withdrawal increases the pressure on Standard Bank. He anticipates that the bank will face more scrutiny from shareholders at this year’s annual general meeting (AGM). “There will be pressure groups and investors who will complain and lodge objections,” he said. Despite this, Standard Bank’s management appears to be handling the pressure without rushing their decision, as they continue to determine whether the pipeline will be beneficial.

As opposition to the East Africa Crude Oil Pipeline grows, the spotlight is increasingly on Standard Bank to make a definitive decision about their involvement in the project. With other major banks pulling out, the stakes are high, and Standard Bank’s decision could significantly impact both the pipeline’s future and the bank’s reputation.

WIlliam Dube

William Dube is a finance and economic news expert with over 10 years of experience in economic anaylsis, financial product assessment and market analysis. With a numerous certificates from prestigious universities including but not limited to Yale University and the University of Pennyslivenia. William specializes in providing insightful news developments in South Africa and commentary on investment strategies, risk management, and global economic trends. You can contact him on

Published by
WIlliam Dube

Recent Posts

Tesla Unveils Refreshed Model 3 in North America with Exciting Upgrades

Model 3 Refresh: Tesla introduces a restyled Model 3 in North America, featuring a rear…

January 11, 2024

SEC Twitter Account Compromised, False Bitcoin ETF Approval Post Triggers Market Volatility

Unidentified individual accessed SEC's Twitter through a third party. Lack of two-factor authentication heightened vulnerability.…

January 11, 2024

Global Currency Markets Navigate Economic Uncertainties: Yen Weakens, Dollar Awaits U.S. Inflation Data

Japanese yen falls against the dollar and euro due to persistently shrinking real wages for…

January 11, 2024

Oil Prices Unmoved as Unexpected U.S. Inventory Build Raises Concerns

Unexpected Inventory Build: U.S. crude inventories unexpectedly grew, sparking concerns about weakening fuel demand and…

January 11, 2024

YanGuFang International Group Appoints Interim Executives Amidst CEO and CFO Detainment

Leadership Shake-up: CEO and CFO of YanGuFang International Group detained by Shanghai Police, prompting interim…

January 11, 2024

Cryptocurrency Market Analysis: SHIB, SOL, and ETH Navigate Challenging Terrain

SHIB breaches 200-day EMA, signaling bearish sentiment. Historical data suggests strong buyer reactions and potential…

January 11, 2024