Angola’s state oil company Sonangol is in discussions with Chinese financial institutions to secure a $4.8 billion loan to help fund the construction of a new refinery at the Atlantic port of Lobito, the company said on Wednesday.
If finalised, the financing would mark Angola’s first borrowing from China since 2017, when the country reduced its reliance on resource-backed loans.
Sonangol’s Chief Executive Officer, Sebastiao Gaspar Martins, said at a news briefing that the company was engaging with “financial institutions in China” to fund one phase of the $6.2 billion project.
“The next phase is estimated at $4.8 billion, and we are contacting Chinese institutions with the support of the contractor, who is also Chinese, in order to obtain this financing,” Martins said.
He did not name the institutions involved, but Angola’s finance ministry said last month that the loan could come from China Development Bank, without providing additional details.
A Sonangol delegation is expected to travel to Beijing in April to meet with Chinese financial institutions. The company said the financing terms would not involve using oil as collateral.
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The Angolan government has described the refinery as a “strategic” project. It is expected to begin producing refined petroleum products in December next year.
Chinese lending to Africa has declined in recent years. Although China was the leading source of credit for African economies up to 2019, lending slowed afterward and fell further during the COVID-19 pandemic.
The reduction in funding left some projects unfinished, including a modern railway line in Kenya.
A study released last month by ONE Data, an independent initiative, found that African countries have been repaying more to China in recent years than they receive in new loans.
Beijing has defended its cooperation with African nations, saying it continues to support the continent in areas such as investment and trade.
Angola’s decision to move away from oil-backed loans was also influenced by a more challenging global environment, including volatile commodity prices, higher interest rates, and shifting risk perceptions.
According to finance ministry data, Angola’s oil-backed debt to China declined by nearly a quarter to $7.73 billion last year, down from $10.146 billion at the end of 2024.
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Image Credit: Reuters
