Angola’s Sonangol in Talks with China for $4. 8 Billion Refinery Loan. Luanda, Angola — Angola’s state-owned oil company, Sonangol, has announced its intention to negotiate a $4.
8 billion loan with Chinese financial institutions to support the construction of a new oil refinery in Lobito, an Atlantic port city. This move marks the first borrowing from China by Sonangol since 2017. CEO Sebastião Gaspar Martins disclosed that the company is in discussions with “financial institutions in China “to secure funding for the first phase of the project, which is estimated to cost $6.
2 billion. Support for the project will also come from a Chinese contractor. Martins revealed that a Sonangol delegation will travel to Beijing in April for further discussions.
The financing agreement is notable for excluding oil as collateral, a departure from past practices. Angola had scaled back its exposure to resource-backed loans from China in 2017, largely due to the volatility of commodity prices. While Chinese lending to Africa reached its peak in 2019, it saw a sharp decline during the pandemic, leaving some projects, such as a Kenyan railway, incomplete.
Despite the downturn, Beijing has maintained its commitment to supporting African investment and trade. Angola’s oil-backed debt to China fell by nearly a quarter last year, reaching $7. 73 billion.
The Angolan government views the Lobito refinery as “strategic, “with expectations for refined petroleum production by December 2027.
The new refinery is seen as crucial for Angola’s economic diversification efforts, reducing its reliance on oil exports and providing a boost to the local economy. It is also expected to enhance the country’s energy security and potentially open up new markets for Angolan crude oil.
Further details regarding the financing terms and the exact nature of the Chinese contractor’s involvement are expected to be revealed as negotiations progress.
Officials have not yet commented on the potential impact of this agreement on the broader relationship between Angola and China.
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