UNITED NATIONS — UN experts say South Sudan is close to securing a $13 billion loan from a company in the United Arab Emirates, despite the oil-rich country’s difficulties in managing debt secured by its oil reserves.
The panel of experts said in a report to the UN Security Council that the loan documents it had seen indicate that the deal with the company, Hamad Bin Khalifa Projects Department, would be the largest loan secured by South Sudanese oil.
Experts monitoring the arms embargo against South Sudan said in the oil section of the report obtained by the Associated Press this week that “servicing this loan would likely tie up most of South Sudan’s revenues (for) many years, depending on oil.” prices.”
Hamad Bin Khalifa Projects Department, registered in Dubai, has no telephone number listed and its website is not working. An email address associated with the company bounced. The UAE Mission to the United Nations declined to comment, saying Hamad is a private company.
South Sudan gained independence from Sudan in 2011 after decades of civil war that cost millions of lives, and oil is the backbone of the young nation’s economy.
Shortly after independence, South Sudan fought its own civil war from 2013 to 2018, when rivals President Salva Kiir and Vice President Riek Machar signed a power-sharing agreement and formed a coalition government. South Sudan is under pressure from the United States and other nations to more quickly implement the 2018 peace deal that ended the civil war and prepare for elections.
According to the latest update from the U.S. Energy Information Administration, South Sudan produced an average of about 149,000 barrels of liquid fuels per day in 2023. The landlocked country uses pipelines from Sudan to transfer its oil to Port Sudan for shipping to global markets in an agreement with the Sudanese Government, which pockets US$23 per barrel in transit fees for oil exports.
South Sudan’s Information Minister Michael Makuei Lueth told journalists in February that external factors, including the civil war that still rages in Sudan, have hurt South Sudan’s oil exports. He also said that oil wells , which were inundated by heavy flooding during the last rainy season, were not yet fully operational.
The oil section in the experts’ report said loan documents from the UAE company, signed between December and February by South Sudan’s finance minister, indicate the loan is divided into tranches.
According to the documents, about 70% of the loan will be allocated to infrastructure projects, with the first payment exceeding $5 billion, the panel said. After a three-year grace period, “the loan will be secured by the delivery of crude oil for a period of up to 17 years.”
The panel of experts raised serious questions about South Sudan’s oil debts.
South Sudan lost a case at the International Center for Settlement of Investment Disputes over a $700 million loan it received from the Qatar National Bank in 2012.
When the panel wrote its report, the court had not reached a decision on how much the government would have to pay, but the Sudan Tribune newspaper reported on Sunday that South Sudan was ordered to pay more than $1 billion.
The expert panel said it also confirmed that the government owes $151.97 million to the East and Southern African Trade and Development Bank from a previous oil-related deal.
South Sudan was supposed to hold elections before February 2023, but that schedule was postponed last August to December 2024.
UN experts say South must secure $13 billion (12″>South Sudan’s president has warned lawmakers “not to cling to power just weeks after his former rival-turned-deputy proposed a further postponement of the elections.
The panel of experts said it would be “a significant milestone” and warned that the country’s leaders are short of time “to ensure that divergent expectations do not fuel further tensions and conflicts”.
Experts also noted the humanitarian crisis in South Sudan, in which around 9 million of the country’s 12.5 million inhabitants are in need of protection and humanitarian assistance, according to the UN. The country has also seen an increase in the number of refugees fleeing the war in neighboring Sudan, further complicating humanitarian assistance to people affected by the crisis in the South. Sudan’s internal conflict.
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