Uganda sets conditions for Kenya pipeline deal

After agreeing to take the Northern route for the export of its crude oil, Uganda has set Kenya three conditions to abide by throughout their partnership.

Financial agreements

Uganda has requested a constant lesser price of its transit fee or tariffs as opposed to the other routes, which Kenya has guaranteed. It is still unclear how the other route prices shall be determined for comparison.

Providing security

Uganda also requires security from Kenya as the work advances, in addition to constructing the pipeline project without postponement.

Views on the conditions

It was noted that Kenya was uncomfortable with certain conditions that Uganda had set.

Irene Muloni, Uganda’s Energy Minister, stated: “It’s not like it was a misunderstanding, but rather they were uncomfortable with some of the terms. The issue of financing was premature before we agree on the structure of the project in terms of ownership.”

At present, Kenya is hesitant about Uganda’s proposed terms and conditions, as they could have the potential to detrimentally increase the cost of the pipeline, with Kenya having the burden of paying.

Edited from various sources Daily Nation and AllAfrica by Stephanie Roker

Published on 19/08/2015

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