Uganda’s oil and gas prospects have suffered a setback after of British bank Barclays said it would stop directly financing new oil and gas projects.
Thank you for reading this post, don't forget to subscribe!As part of its updated climate strategy, the bank added it would scale back lending for existing fossil fuel projects as the sector faces intense pressure from activist investors to help tackle climate change.
“Barclays today publishes a revised Climate Change Statement to progress its climate strategy and continues its focus on clients actively engaged in the energy transition,” it said in a statement.
There will be “no project finance, or other direct finance to energy clients, for upstream oil and gas expansion projects or related infrastructure”, the lender added.
Barclays will also impose “restrictions for new and non-diversified oil and gas clients engaged in expansion”.
Additional curbs will be introduced “on unconventional oil and gas, including… extra heavy oil”.
Barclays also expects “energy clients to produce transition plans or decarbonisation strategies” by 2025.
And it will require energy clients to commit to other targets, including the reduction of methane and carbon emissions from operations.
The news will be welcomed by climate activists in Uganda who last year slammed the bank for authoring a report that glossed over the environmental and social impact of the East African Crude Oil Project (EACOP).
In a March 2023 report, six Barclays energy analysts, led by Lydia Rainforth, said that while legitimate environmental and human rights concerns have been raised about EACOP, these were “mostly exaggerated or misguided.”
More than 40 environmental and social justice groups in Uganda and beyond wrote to the bank’s chief executive officer, C.S Venkatakrishnan, asking him to retract the report that they said was “highly unprofessional, biased and damaging to Barclays’ reputation.”
Barclays is Europe’s biggest financier of fossil fuels, according to data cited by Reclaim Finance.
The British lender’s move to curb financing of oil and gas projects follows similar announcements from European bank heavyweights BNP Paribas, Credit Agricole, HSBC, ING and Societe Generale.
Barclays had announced in March 2020 that it wanted to become a “net zero bank” by 2050.