Published: Saturday, May 18, 2020
UNITED NATIONS – U.N. experts claim that South Sudan is on the verge of securing a loan worth $13 billion from a company based in the United Arab Emirates despite its difficulties managing its debts backed up by oil reserves.
In a report submitted to the U.N. Security Council, the panel of experts stated that documents they have seen show the loan deal with Hamad bin Khalifa’s Department of Projects would be the largest oil-backed loan ever made by South Sudan.
The experts who monitor the arms embargo on South Sudan said, in the section of the report titled “Oil” that The Associated Press obtained this week, that “servicing the loan would likely bind up most of South Sudan’s revenue for many years depending on oil price.”
Hamad bin Khalifa department of Projects is registered in Dubai but has no phone number listed and its website doesn’t work. Emails sent to the company’s email address bounced. The UAE Mission at the United Nations refused to comment on Hamad, stating that it is a private firm.
South Sudan gained its independence from Sudan in 2011, after decades of civil conflict that claimed millions of lives. Oil is the mainstay of the economy of this young nation.
South Sudan fought a civil war between 2013 and 2018, shortly after its independence. Rivals President Salva Kiir, and Vice President Riek Makar then signed a power sharing agreement and formed a government coalition. The United States and others are pressuring South Sudan to implement the 2018 deal that ended its civil war more quickly and prepare for elections.
South Sudan will produce an average of 149,000 barrels liquid fuels a day by 2023, according to the latest U.S. Energy Information Administration update. According to an agreement, the landlocked country uses Sudan’s pipelines to transport its oil to Port Sudan to be shipped to global markets. The Sudanese Government pocketed $23 per barrel in transit fees.
In February, South Sudanese Minister of Information Michael Makuei Lueth said to reporters that external factors, such as the civil war still raging on in Sudan, had hurt South Sudan’s exports. He said that oil wells which had been flooded by heavy rains during the previous rainy season were not yet fully operational.
In the section of the report on oil, the experts said that documents signed by the South Sudanese minister of finance between December and January for a loan from the UAE firm indicate that the loan was divided into several tranches.
The panel stated that the documents indicate that around 70% of the loan will be allocated to projects in the infrastructure sector, and the first payment is expected to exceed $5 billion. After a three-year period of grace, “the loan is secured by the delivery of crude for up to 17 years.”
The panel of experts raised questions about South Sudan’s oil-based obligations.
South Sudan lost a dispute at the International Center for Settlement of Investment Disputes relating to a $700-million loan it received in 2012 from Qatar National Bank.
The tribunal did not decide how much South Sudan would be required to pay when the panel prepared its report. However, The Sudan Tribune reported on Sunday that South Sudan had been ordered to pay over $1 billion.
The experts panel said that it had also confirmed the fact that the Eastern and Southern African Trade and Development Bank owed the government $151,97 million for a prior oil-related transaction.
South Sudan had been scheduled to hold elections by February 2023. However, this timetable has now been pushed back to December 2024.
U.N. experts claim that South Sudan can secure a $13 billion (12″)>South Sudan’s President warned lawmakers not to “cling to the power” just weeks after his ex-rival turned deputy proposed another postponement of election.
The experts warned that time is running out for the leaders of the country to “ensure divergent expectations don’t fuel further tensions or strife.”
Experts also noted the humanitarian crisis in South Sudan. According to the U.N., approximately 9 million of South Sudan’s 12,5 million citizens need humanitarian aid and protection. South Sudan has seen an increase of refugees from the war in Sudan. This complicates the humanitarian aid to those who are affected by the internal conflict.
Source: ABC News