By
Jared Ferrie ( bloomberg.com )
China will provide South Sudan $8
billion in development loans over the next two years, a
government spokesman said.
The loans will be used for road construction, agriculture,
hydroelectricity, infrastructure and telecommunications, which
would be built by Chinese companies, according to Barnaba Marial
Benjamin, South Sudan’s government spokesman. He declined to
reveal the cost of the borrowings.
China signed agreements promising to provide the funding
during South Sudanese president
Salva Kiir’s visit to Beijing on
April 23 to April 26. “It was a very successful visit,”
Benjamin said by phone today from the capital Juba. “I think
this funding came at the right time.”
South Sudan acquired three quarters of the formerly united
nation’s 490,000 barrels of oil a day output when it declared
independence on July 9. The export pipelines and processing
facilities remain in Sudan and the two countries have been
unable to agree on fees for use of the infrastructure. South
Sudan lost 98 percent of its revenue when it halted production
in January after accusing Sudan of stealing $850 million worth
of its oil. Sudan said it confiscated the crude to make up for
unpaid fees.
Kiir discussed South Sudan’s plan to build export pipelines
that bypass Sudan with Chinese officials, Benjamin said, adding
that China didn’t agree to finance such a project.
“They will consider the fact that it is important to have
an alternative pipeline,” he said.
Alternative Pipelines
South Sudan said in January that it was planning
alternative links. It signed a memorandum with Ethiopia in
February to build a pipeline via Djibouti, and said that it’s in
talks with a Texas-based construction company to build another
line to the Kenyan coastal town of Lamu.
South Sudan’s chief negotiator with Sudan said on April 23
that his country has taken a “strategic decision” to no longer
export its oil through Sudan.
Oil revenue sharing is among issues outstanding since the
south seceded after fighting a two-decade war with Khartoum.
Talks since independence have failed to yield agreements on
disputed border regions, and the two nation’s forces have
clashed frequently along the frontier.
China dispatched an envoy to the Sudanese capital Khartoum
to try and help ease tensions, who would also probably visit
Juba in South Sudan in the coming week, Benjamin said.
Crude in both countries is pumped mainly by China National
Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s
ONGC Videsh Ltd.
original from bloomberg.com
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