CDB provides $2 billion loan to Sonangol for Lobito Refinery Construction Project and other unspecified oil and gas projects

On December 12, 2014, China Development Bank (CDB) and Sonangol Finance Limited — a wholly owned subsidiary of Sociedade Nacional de Combustiveis de Angola (Sonangol), Angola's state-owned oil company — signed a $2 billion loan agreement for the development of oil and gas projects, such as the Lobito Refinery Construction Project The loan has a 10-year maturity period and it is reportedly secured by (i.e. collateralized with) oil exports from Sonangol. Its other borrowing terms (interest rate, grace period, fees) are unknown. A statement about the loan, posted on Sonangol's website, announced that construction of the country's long-planned second refinery at Lobito would begin in 2015. Sonangol had been under pressure for a long time to build a new refinery as it heavily depends on imports for its fuel requirements. However, construction of the Lobito refinery was frozen in 2016 due to high costs. Then, in 2021, Joaquim de Sousa Fernandes, chairman of the executive council of Sonaref (a subsidiary of Sonangol), announced that the project was being revived and the construction of the Lobito refinery was scheduled for completion in 2025.

Additional details

1. Sonangol's 2016 and 2018 Annual Report stated that all outstanding loans have an interest rate of 3.5% + LIBOR; however, it is unclear if this represents the interest rate for this particular loan. This issue warrants further investigation.

Number of official sources

9

Number of total sources

20