Angola’s state energy firm, Sonangol, has entered negotiations with Chinese financial institutions to secure approximately $4.8 billion in funding for the construction of a new refinery in Lobito. The project, located along Angola’s Atlantic coastline, is considered central to the country’s plan to expand domestic fuel processing capacity.
Chief executive Sebastião Gaspar Martins confirmed that discussions are underway to finance part of a development phase valued at roughly $6.2 billion. A Chinese contractor is expected to play a significant role in executing the works. Company representatives are scheduled to travel to Beijing in April to continue negotiations.
Unlike earlier arrangements between Angola and Chinese lenders, the proposed financing structure does not rely on crude oil as collateral. This marks a departure from the resource-backed loan model that characterized previous borrowing agreements.
Changing Dynamics in China-Africa Lending
Angola scaled back its dependence on commodity-secured debt after 2017, when fluctuations in oil prices exposed vulnerabilities in repayment structures tied to exports. Since then, Luanda has sought to diversify funding sources and rebalance its debt profile.
Chinese lending to African countries reached its high point before the global pandemic but declined sharply afterward, with several high-profile infrastructure projects across the continent experiencing delays or restructuring. Nevertheless, Beijing continues to emphasize its commitment to trade and investment partnerships in Africa.
Recent data indicate that Angola’s outstanding oil-backed obligations to China have declined significantly, reflecting ongoing efforts to reduce exposure and improve fiscal sustainability.
Strategic Importance of Lobito Refinery
The Angolan government has identified the Lobito refinery as a priority national project. Increasing domestic refining capacity is intended to reduce reliance on imported petroleum products and strengthen energy security.
Officials anticipate that production of refined fuels could begin by late 2027 if financing and construction proceed on schedule. The development is expected to enhance Angola’s industrial base while reinforcing its role in regional energy markets.
The outcome of the negotiations in Beijing will likely shape not only the refinery’s future but also the broader trajectory of Angola’s financial cooperation with China.
