Fossil Fuel Funding: A Barrier to Sustainable Energy Transition and Conservation in Great Lakes

A new report by the Environment Governance Institute (EGI) in Uganda highlights the hidden costs of fossil fuel financing in Africa’s Great Lakes region.

Countries like Uganda, the Democratic Republic of Congo, and Tanzania face difficult choices between energy development and environmental sustainability, as foreign investments, especially from Asia, continue to flow into fossil fuel projects.

The report reveals that Export Credit Agencies (ECAs), particularly from China, India, and South Korea, have invested 88% of their funding in fossil fuel projects, such as Uganda’s East African Crude Oil Pipeline (EACOP) and Tanzania’s Nyerere Hydropower Project.

In stark contrast, only 0.6% of their financial backing goes to renewable energy, mostly in the form of small-scale solar projects.

Samuel Okulony, Executive Director of EGI Uganda, warns that prioritizing fossil fuels steers the region away from sustainable energy solutions, exacerbating environmental and social issues in the affected communities.

The Environmental Toll

Fossil fuel development has taken a heavy toll on the ecosystems across the Great Lakes region, endangering biodiversity hotspots and disrupting wildlife migration routes.

Uganda’s Albertine Graben, home to endangered species like elephants and chimpanzees, has become a hub for oil extraction, severely damaging the local ecology.

Projects such as EACOP have led to widespread deforestation, soil erosion, and the reduction of carbon-storing forest areas.

For locals like Jane Mbabazi, a resident of Kingfisher, Kikuube, the damage is deeply personal.

"We were left to live on the mercy of God, living near the oil pipeline has turned our lives into a nightmare," she shared, after losing her husband, a fisherman, when his fishing grounds were disrupted by oil activities.

Fossil fuel projects also introduce significant pollution, contaminating air, soil, and water.

The report shows that polluted waterways are harming fisheries and agricultural lands, leading to rising cases of waterborne diseases and decreased agricultural productivity for communities dependent on these resources.

Displacement and Disenfranchisement

The human cost of these ECA-backed projects is staggering, with approximately 120,000 people expected to be displaced by oil and hydroelectric developments.

The displacement process has been chaotic, with delayed or insufficient compensation, particularly affecting women and marginalized communities.

John Peter Okwi, programme coordinator at EGI Uganda, notes that women in resettlement areas face increased harassment and violence, as they are pushed into exploitative situations to survive.

These developments not only disrupt families but also exacerbate gender inequalities, further marginalizing women’s roles in building community resilience.

The Broken Promise of Local Jobs

While fossil fuel projects often promise job creation, the reality is that the majority of well-paying jobs go to foreign workers, leaving local communities with low-wage, temporary employment.

In Hoima, the influx of workers has driven up the cost of living, with food and housing prices soaring, making it increasingly difficult for residents to afford basic necessities.

This has deepened the socioeconomic divide between those who benefit from the projects and those who bear the costs.

Fossil fuel projects in the Great Lakes region are also eroding cultural identities. In DR Congo, for example, communities near the Mengo-Kundji-Bindi oil fields fear that the loss of sacred forest areas will undermine their cultural heritage and social cohesion.

Military presence in these project areas has only worsened the situation, with reports of forced displacements and intimidation by armed forces.

The militarization of these regions has silenced local voices and violated human rights, further alienating communities from decision-making processes.

Call for ECA Accountability and Investment

EGI’s report stresses the urgent need for ECAs to redirect their investments towards renewable energy projects, which are more sustainable and align with global climate goals.

The institute calls for stronger regulations to ensure that ECAs conduct proper environmental and social impact assessments and engage in transparent community consultation processes.

To foster a just energy transition, EGI recommends policy changes in Great Lakes countries to promote green financing and renewable energy development.

“If ECAs continue prioritizing fossil fuel projects, these countries risk being locked into an unsustainable cycle of dependency,” warns Okulony.

The EGI report underscores the wide-ranging impact of ECA-backed fossil fuel projects in Africa’s Great Lakes. While these projects promise economic growth, the realities for local communities reveal environmental destruction, social upheaval, and cultural erosion.

As the Great Lakes countries, including Uganda, DR Congo, and Tanzania, chart their energy futures, the report serves as a crucial reminder that the path to sustainable development requires not only innovation but also a commitment to justice, accountability, and renewable energy investments that benefit both people and the planet.