South Sudan seeks $13 billion-backed loan from UAE

South Sudan is nearing an agreement with a UAE company for an oil-backed loan worth $13 billion, the largest in Africa’s newest nation’s history.

The news was reported by AP citing an unnamed UN source which said the deal is close to being signed.

“Servicing this loan would likely tie up most of South Sudan’s revenue (for) many years, depending on oil prices,” AP said, citing unnamed UN experts.

“The loan will be secured against the delivery of crude oil for a period of up to 17 years,” it said.

South Sudan has been marred by infighting with a bloody civil war that lasted from 2013 to 2018, killing hundreds of thousands.

According to the U.S. Energy Information Administration’s latest update, South Sudan produced an average of about 149,000 barrels of liquid fuels per day in 2023. The landlocked country uses Sudan’s pipelines to transfer its oil to Port Sudan for shipment to global markets in an agreement with the Sudanese government, which pockets $23 per barrel as transit fees for the oil exports.

China has opted for resource backed loans in recent years across the African continent, targeting strategic metals, in a practice that was criticized by the African Development Bank.