Africa-Press – South-Sudan. A Dubai-based company has finalized a deal to lend South Sudan $12.9 billion in exchange for oil over a 20-year period, according to a leaked UN report cited by Bloomberg.
The agreement, one of the largest of its kind, has raised concerns within the United Nations.
The report by a UN Security Council panel indicates that Dubai’s Hamad Bin Khalifa Department of Projects (HBK DOP) reached the agreement with South Sudan’s former finance minister, Bak Barnaba Chol, between December 2023 and February 2024.
The deal is controversial as it’s nearly twice South Sudan’s GDP. The report notes that 70% of the funds would be used for infrastructure, despite the country facing famine and conflict.
It also warns the loan, roughly five times the country’s existing external debt, could consume a large portion of oil revenues for many years.
Under the terms, South Sudan would receive $10 less than the international benchmark price per oil barrel.
HBK DOP was founded by Sheikh Hamad Bin Khalifa Al Nahyan, a distant relative of Abu Dhabi’s royal family. It’s unclear if South Sudan has yet received an initial $5 billion installment from the deal.
The UAE has pledged over $97.3 billion in African investments from 2022-2023, seeking to become the continent’s largest investor.
In February 2024, Abu Dhabi’s ADQ sovereign wealth fund pledged $35 billion to develop Egypt’s Ras El Hikma peninsula.
Oil-rich nations often turn to oil-backed loans when they struggle to access conventional financing. Nigeria recently secured a $3.3 billion oil-backed loan from Afreximbank in August 2023.
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