NAIROBI (Reuters) -South Sudan’s petroleum ministry confirmed on Thursday that it had asked for a total of $2.5 billion in oil-backed loans from two international firms operating in the country.
The total amount requested is larger than the government’s annual budget, which is less than $2 billion, and the roughly $2.2 billion the United Nations estimates South Sudan has received in oil-backed loans since independence in 2011.
The ministry confirmed it had sent two letters requesting the loans late last month, but in a statement rejected what it said was defamatory commentary on social media relating to them.
“The requested funds were intended solely for official government purposes, not for personal or individual benefit,” it said, adding that the requests were preliminary and that no funds have been transferred.
In an October 27 letter to ONGC Nile Ganga B.V., a local unit of India’s ONGC Videsh, which was published online and confirmed as genuine by the petroleum ministry, it requested an advance payment of $1 billion against crude oil entitlements controlled by the national oil and gas company.
The ministry also confirmed as genuine a letter in which it requested $1.5 billion under the same conditions from China National Petroleum Corporation (CNPC) on October 31.
In both cases, the ministry proposed repaying the loan within 54 months of disbursement of the funds.
ONGC Videsh, CNPC and state-owned Nile Petroleum Corporation did not immediately respond to emailed requests for comment.
The International Monetary Fund has raised concerns about the impact of oil-backed loans on South Sudan’s public debt.
The U.N. says corruption has been a major driver of repeated bouts of armed conflict in South Sudan, including a 2013-2018 civil war in which an estimated 400,000 people died.
U.N. investigators also said in September that the systematic looting of its oil riches by political elites has fuelled a humanitarian crisis in the impoverished country.
(Writing by Elias Biryabarema; Editing by Aaron Ross and Alexander Smith)
