South Sudan seeks $2.5 billion in oil-backed loans mid rising debt concerns

South Sudan has confirmed it requested $2.5 billion in oil-backed loans from two international firms,exceeding the country’s annual budget of less than $2 billion. The Petroleum ministry said on Thursday that the requests,sent in late October,were preliminary and intended solely for official Government purposes.

The loans comprise $1 billion from ONGC Nile Ganga B.V.,a subsidiary of India’s ONGC Videsh,and $1.5 billion from China National Petroleum Corporation (CNPC),both to be repaid within 54 months against crude oil entitlements controlled by the state-owned Nile Petroleum Corporation.

The move comes amid growing scrutiny over the impact of such loans on South Sudan’s public debt,which the United Nations estimates at roughly $2.2 billion in oil-backed loans since independence in 2011. While the ministry dismissed online criticisms as defamatory,the International Monetary Fund has raised concerns about the country’s rising debt levels. The government has yet to receive any disbursement from the requested funds,highlighting ongoing negotiations with the international oil firms.