UN experts say South Sudan is close to securing a $13 billion oil-backed loan from a UAE company

The country has also seen election delays and a worsening humanitarian crisis, with nine million out of 12.5 million people needing protection and assistance, compounded by an influx of refugees from Sudan.

UN experts report that South Sudan is nearing a $13 billion loan agreement with the UAE's Hamad Bin Khalifa Department of Projects, despite the country's difficulties managing debts backed by oil reserves. This deal, outlined in loan documents reviewed by the experts, would be South Sudan's largest-ever oil-backed loan. Servicing the loan could monopolize South Sudan's revenue for many years, dependent on oil prices.

Hamad Bin Khalifa Department of Projects, registered in Dubai, has no listed phone number, and its website is inactive. An associated email address returned undelivered, and the UAE Mission to the UN declined to comment, citing Hamad as a private company.

South Sudan, which gained independence from Sudan in 2011 after decades of civil war, relies heavily on oil for its economy. The country endured its own civil war from 2013 to 2018, leading to a power-sharing agreement between President Salva Kiir and Vice President Riek Machar. South Sudan is under international pressure to implement the 2018 peace deal and prepare for elections.

According to the US Energy Information Administration, South Sudan produced an average of about 149,000 barrels of liquid fuels per day in 2023, utilizing Sudan's pipelines to Port Sudan, with transit fees costing $23 per barrel. South Sudanese Information Minister Michael Makuei Lueth noted that external factors, including ongoing civil war in Sudan and flooding, have impacted oil exports.

The loan agreement, signed between December and February by South Sudan’s finance minister, earmarks about 70 percent of the funds for infrastructure projects, with an initial payment exceeding USD 5 billion. After a three-year grace period, the loan will be repaid through crude oil deliveries for up to 17 years.

The panel raised concerns about South Sudan's oil-based debts, noting a loss in a $700 million loan case against Qatar National Bank and another debt of $151.97 million owed to the Eastern and Southern African Trade and Development Bank. The country has also seen election delays and a worsening humanitarian crisis, with nine million out of 12.5 million people needing protection and assistance, compounded by an influx of refugees from Sudan.