Tanzania and Uganda have today signed an Intergovernmental Agreement (IGA) for the construction of the proposed $3.55 billion (about Sh367 billion) crude oil pipeline in Kampala.
Tanzania’s Minister for Constitution and Legal Affairs, Prof Palamagamba Kabudi and Uganda’s minister of Energy Irene Muloni represented their two countries during the signing of the project early today.
Ugandan officials told Reuters that the deal covers terms on tax incentives for the project, implementation timelines, the size of the pipeline and local content levels, keeping it on track to complete in 2020.
The signing follows a discussion between President John Magufuli and his Uganda counterpart Yoweri Museveni, which was held in Dar es Salaam last week.
The two leaders had on Sunday signed a communique agreeing to begin setting up the East African Crude Oil pipeline (EACOP) plan from Hoima in Uganda to Tanga in Tanzania.
Uganda and Tanzania agreed last year that the 1,443-kilometre crude oil pipeline would go through the latter country after shelving plans to have it pass through Kenya.
The key infrastructure will transport Ugandan crude to international export markets through the Tanzanian port city.
Additional reporting by Reuters
Key CBK Indicative Exchange Rate: $1 = Sh103.3094