A coalition of major reinsurance companies has pulled out of the East African Crude Oil Pipeline (EACOP) project, citing environmental concerns and community pollution risks, the Nigerian Tribune reported.
According to the report, the move casts a fresh shadow over the controversial project, which is already facing delays and financial hurdles.
Sirius Point, Riverstone International, Enstar Group, and specialty insurers Blenheim and S.A. Meacock have publicly confirmed their withdrawal, joining a growing list of nearly 30 reinsurance firms distancing themselves from EACOP.
Activists have long criticized the pipeline for its potential environmental damage and impact on local communities.
"We are not participating in the EACOP tender," confirmed Sirius Point, reflecting the growing consensus among insurers about the project's financial risks and reputational damage.
StopEACOP campaigners say the withdrawals highlight the project's increasing financial insecurity and growing opposition to fossil fuel expansion. They urge insurers like AIG, Tokio Marine, Chaucer, and Hiscox to reconsider their involvement.
"Insurers are the great enablers," said Will Attenborough, Climate Finance Strategist for Coal Action Network. "What will AIG and Chaucer choose: short-term profits or a safe, healthy world?"
The East African pipeline, majority-owned by French oil giant Total, has faced numerous challenges since its inception. Construction has been delayed by four years, and securing $3 billion in financing and adequate insurance has proven difficult.
Industry sources attribute the project's struggles to local and international criticism, with Western banks hesitant to engage and Chinese lenders still months away from a final decision. The European Parliament has condemned the project, and climate scientists warn it contradicts commitments to combat climate change.
Human rights violations further complicate the picture. Reports detailing harassment, land grabs, and arrests of protesters in Uganda and Tanzania have drawn condemnation from various organizations, including the UN Special Rapporteur on human rights defenders.
Environmental activists and local communities see the insurers' withdrawals as a significant victory. "This is a major blow to EACOP's viability and provides hope for communities facing displacement and activists risking their lives," said Samuel Okulony, Director of Environment Governance Institute Uganda.
With COP28 emphasizing the need to transition away from fossil fuels, the pressure on EACOP and its remaining supporters is expected to intensify. Whether the project can overcome these challenges and secure the necessary funding and insurance remains uncertain.