A recent report from the Environment Governance Institute (EGI) in Uganda examines the hidden impacts of fossil fuel financing in Africa’s Great Lakes region, highlighting the tough decisions facing countries like Uganda, the Democratic Republic of Congo (DRC), and Tanzania between advancing energy development and maintaining environmental sustainability.
The study reveals that Export Credit Agencies (ECAs) from Asia are heavily funding fossil fuel projects, creating social, environmental, and economic problems that could derail the region’s transition to clean energy.
ECAs, government-backed bodies that offer financial backing for large international projects, have been instrumental in developing energy infrastructure in the Great Lakes.
The report finds that ECAs from China, India, and South Korea are directing 88% of their funds toward fossil fuel projects like Uganda’s East African Crude Oil Pipeline (EACOP) and Tanzania’s Nyerere Hydropower Project, while only 0.6% goes to renewable energy, mostly small solar ventures.
Samuel Okulony, Executive Director of EGI Uganda, cautions that the emphasis on fossil fuels is detracting from the region’s potential for sustainable energy solutions.
“Focusing on fossil fuels steers the region away from cleaner energy alternatives and exacerbates environmental and social issues in affected communities,” he said.
Environmental Consequences
Fossil fuel developments have caused considerable harm to ecosystems in the Great Lakes, threatening biodiversity and wildlife migration routes.
Uganda’s Albertine Graben, home to endangered species such as elephants and chimpanzees, has been impacted by oil activities that threaten its ecological balance. Projects like EACOP have caused significant deforestation, disrupting habitats, accelerating soil erosion, and reducing carbon-capturing forests.
For locals like Jane Mbabazi from Kingfisher in Kikuube, the damage is deeply personal. Her husband, a fisherman, perished in Lake Albert while trying to support their seven children after oil activities disrupted his livelihood.
“We were left at the mercy of God. Living near the oil pipeline has turned our lives into a nightmare,” she tearfully shared.
The environmental harm goes beyond habitat destruction, with fossil fuel projects causing air, soil, and water pollution. EGI’s report notes increased contaminants in local waterways, which have negatively affected fisheries and agriculture. Communities relying on these resources have faced rising waterborne diseases and lower crop yields.
Displacement and Social Impact
The human cost of ECA-backed projects is significant, with about 120,000 people expected to be displaced by oil and hydroelectric projects across the region, often left in financial strain and social instability.
“The displacement process has been disorganised, with landowners facing delays or insufficient compensation, and women and marginalised groups excluded from key decisions,” says John Peter Okwi, Program Coordinator at EGI Uganda.
In resettlement areas, access to basic services such as clean water, healthcare, and education is often inadequate, worsening conditions for displaced families. Additionally, the influx of project workers has led to reports of increased harassment and violence against local women.
Jane Mbabazi, a resident of Kingfisher, Kikuube, who lost a husband in the Albert waters after his husband’s fishing grounds were disrupted by oil activities looking helpless in front of her hamlet. “Women are forced into exploitative situations just to survive,” Okwi notes, emphasising how these developments worsen gender inequality and limit women’s roles in promoting community welfare.
Unfulfilled Promises of Local Employment
A key promise of fossil fuel projects is the creation of jobs, yet EGI’s report reveals that most high-paying positions are filled by foreigners, leaving local workers with low-wage, temporary jobs.
In Hoima, the cost of food and housing has soared due to speculative land investments and expatriate demand. As prices rise, local residents struggle to meet basic needs, deepening the socioeconomic divide between those benefiting from these projects and those bearing their consequences.
Cultural Impact and Rising Tensions
For many communities in the Great Lakes, the damage goes beyond economic and environmental losses–it threatens cultural identity.
Projects like EACOP disrupt ancestral lands, affecting traditional practices and access to sacred sites. In the DRC, residents near the Mengo-Kundji-Bindi oil fields worry that the loss of vital forest areas will erode their cultural heritage and community cohesion.
The presence of military forces in project areas has heightened tensions, with reports of forced displacements and intimidation by armed personnel. EGI sees this militarisation as an attempt to silence local voices and a violation of human rights, further alienating communities from the decisions impacting their lives.
A Call for ECA Accountability and Focus on Renewables
EGI’s report calls for a shift in the focus of ECAs toward renewable energy projects, which offer long-term sustainability and align with global climate goals.
The institute advocates for stronger regulations governing ECAs in Africa, including mandatory environmental and social impact assessments, and the inclusion of community consultation processes to ensure transparency and accountability.
To facilitate a successful energy transition, EGI recommends that Great Lakes countries adopt policies that promote green financing and renewable energy initiatives.
“If ECAs continue to prioritise fossil fuel projects, these countries risk becoming trapped in a cycle of dependency,” warns Okulony.
Towards a Just Energy Transition
The EGI report highlights the broad and far-reaching impact of ECA-backed fossil fuel projects in Africa’s Great Lakes.
While these projects may promise economic growth, the reality for local communities is one of environmental devastation, social dislocation, and cultural erosion.
As the region shapes its energy future, the report underscores the importance of not only technological innovation but also a commitment to justice and accountability.
As Uganda, the DRC, and Tanzania navigate their next steps, the pressure mounts for a redirection of foreign investment to support an equitable energy transition that benefits both people and the environment.
