Angola’s Sonangol in talks with Chinese lenders for $4.8bn loan

Angola’s state oil company Sonangol is currently in talks with Chinese banks as part of efforts to obtain a $4.8bn loan for the construction of the 200,000 barrels per day (bpd) Lobito refinery.

News of the ongoing negotiations was revealed by Sonangol’s CEO Sebastiao Gaspar Martins, who confirmed that a company delegation was expected to travel to Beijing in April to continue discussions.

Sonangol’s request for funding stems from a $4.8bn financing gap, which has stalled progress on the project, and is the first such request made since 2017 – signalling a move away from resource-backed funding, according to Energy Capital & Power.

Start-up for Lobito’s first phase is set for September 2026-February 2027, while a front-end engineering and design (FEED) study covering a single-train facility with a hydrocracker was expected to be completed by the end of 2022; however, progress has been slow, with

Angolan authorities had first initiated talks on the refinery around 20 years ago.

Upon completion, Lobito is expected to become the country’s largest plant, followed by 65,000 bpd Luanda and 60,000 bpd Cabinda. Another refinery, 150,000 bpd Soyo, is currently also in the works; however, it has been stuck in limbo, with its developer Quanten Consortium struggling to obtain enough funding to continue its construction.

Anxious to avoid a similar outcome, Sonangol is keen to obtain a loan that will avoid financing structures that tie repayment directly to volatile commodity revenues – meaning it can reduce its exposure to price shocks long-term and ensure construction can be completed.

Indeed, Angola’s decision to halt its reliance on resource-backed Chinese loans in 2017 stemmed from such concerns, particularly when commodity prices became increasingly unstable at the time, according to Africa Oil & Gas Report. Current negotiations are focused on a new template that will separate sovereign debt obligations from oil, a prudent decision amid a general increase in debt-to-GDP on the African continent of 65% in 2025 alone.