(JUBA) – South Sudan has requested new oil backed loans worth $2.5 billion (SSP 17 trillion) as the government turns again to Asian energy partners despite increasing concerns over the country’s rising debt.
The Ministry of Petroleum has asked India’s ONGC Videsh for $1 billion (SSP 7 trillion) and China National Petroleum Corporation for $1.5 billion (SSP 11 trillion). The loans would be secured with future crude shipments and repaid over 54 months. Officials say the funds will support government operations during a period of heavy financial pressure.
These requests add to more than $2.2 billion (SSP 16 trillion) in existing oil backed debt. Total public debt stood at about $3.7 billion (SSP 26 trillion) at the end of 2023. The International Monetary Fund and the United Nations warn that continued borrowing against oil weakens South Sudan’s financial stability.
Legal and financial tensions are also growing. A court in London has ordered South Sudan to pay $657 million (SSP 5 trillion) to Afreximbank after a default. Other creditors, including Vitol and BB Energy, are seeking compensation for undelivered oil.
An October 2025 Sudd Institute report says reliance on oil advances reflects the failure to implement the 2013 Petroleum Act. The law required the creation of a stabilisation fund and a future generation fund to soften market shocks, but neither was established. As a result, oil backed loans became a regular tool for managing the budget.
Economist Bec George Anyak says the situation is driven more by weak governance than external shocks. Oil brings in more than 90 percent of government income, yet growing debt obligations and off budget spending continue to reduce available funds for essential services.
The United Nations has noted that poor oversight of oil revenue contributed to the political tensions that fed the 2013 to 2018 conflict.
Oil production remains low. In 2024, South Sudan produced about 72,000 barrels per day, reducing its ability to meet debt obligations and finance government programmes.
Analysts warn that without major reforms, South Sudan could face another financial crisis. The Sudd Institute recommends suspending new oil backed loans, establishing a full debt registry and enforcing the Petroleum Act.
While borrowing against future crude may provide short term relief, experts say it increases long term risks for an economy already struggling with declining output and rising financial pressure.
Juba Chases $2.5 Billion Credit From China and India
| Details | |
|---|---|
| New Loan Request | South Sudan seeks $2.5 billion (SSP 17 trillion) in new oil backed loans from CNPC and ONGC Videsh. |
| Breakdown of Loan Request | $1.5 billion (SSP 11 trillion) from CNPC; $1 billion (SSP 7 trillion) from ONGC Videsh. |
| Existing Oil Backed Debt | Over $2.2 billion (SSP 16 trillion) already owed. |
| Total Public Debt | About $3.7 billion (SSP 26 trillion) as of end 2023. |
| Court Ruling | London court orders South Sudan to pay $657 million (SSP 5 trillion) to Afreximbank after default. |
| Other Claims | Vitol and BB Energy pursue compensation for undelivered oil cargoes. |
| Output Constraints | Oil production fell to 72,000 barrels per day in 2024. |
| Governance Concerns | Sudd Institute cites failure to implement the 2013 Petroleum Act. |
| Revenue Dependence | Oil accounts for over 90 percent of government income. |
| Risk Highlighted | IMF and UN warn new loans could worsen South Sudan’s debt stability. |
| Recommended Actions | Pause oil backed loans, create debt registry, enforce Petroleum Act. |