A panel of U.N. experts has reported that South Sudan is close to securing a $13 billion loan from a company in the United Arab Emirates, which would be the country’s largest-ever oil-backed loan. The deal with Hamad Bin Khalifa Department of Projects could tie up most of South Sudan’s revenue for many years, depending on oil prices. The UAE company, registered in Dubai, has no listed phone number or working website, and the UAE Mission to the United Nations declined to comment, stating that Hamad is a private company. Oil is crucial to South Sudan’s economy, which gained independence from Sudan in 2011 after years of civil war.
Following its own civil war from 2013 to 2018, South Sudan formed a coalition government with President Salva Kiir and Vice President Riek Machar. The country is under pressure to implement the 2018 peace deal more quickly and prepare for elections. South Sudan produces an average of 149,000 barrels of liquid fuels per day, using Sudan’s pipelines to export oil to global markets, paying $23 per barrel in transit fees to the Sudanese government. South Sudan’s oil exports have been affected by external factors such as the ongoing civil war in Sudan, as well as operational challenges due to heavy floods that affected oil wells.
The loan documents signed by South Sudan’s minister of finance show that 70% of the loan from the UAE company is allocated to infrastructure projects, with the first payment exceeding $5 billion. The loan, split into tranches, will be secured against the delivery of crude oil for up to 17 years following a three-year grace period. The experts raised concerns about South Sudan’s oil-based debts, including a case in which the country lost against the Qatar National Bank and is now ordered to pay over $1 billion. Additionally, there is a debt of $151.97 million owed to the Eastern and Southern African Trade and Development Bank from a previous oil-related deal.
South Sudan was initially scheduled to hold elections before February 2023, but the timeline was postponed to December 2024. In early April, President Salva Kiir cautioned lawmakers against clinging to power, while his former rival turned deputy proposed further postponing the elections. The panel of experts emphasized the importance of holding elections as a significant milestone and warned that leaders in the country should act quickly to prevent further tensions and conflicts. South Sudan is currently facing a humanitarian crisis, with an estimated 9 million out of 12.5 million people needing protection and humanitarian assistance. The country has also seen an influx of refugees fleeing the war in neighboring Sudan, complicating efforts to provide humanitarian aid to those affected by internal conflict.
