Angola’s Sonangol Seeks $4.8B Financing from China for Refinery

On 25 February 2025, Angola’s state-owned enterprise Sonangol revealed that it has initiated talks with China to secure a loan of $4.8 billion to finance the construction of a new refinery in Lobito. Sonangol has already selected China National Chemical Engineering as the main contractor for the project and with the support of that Chinese company, it has contacted several Chinese financial institutions. US engineering consulting firm KBR will supervise and manage the project

The total cost of the Lobito Oil Refinery is estimated at USD 6.2 billion and Sonangol will invest USD 1.4 billion of its own money. The refinery will have an annual capacity of 200,000 barrels per day (bpd and would take two years to be completed. It will surpass the 65,000-bpd Luanda refinery to become Angola’s largest when completed.

Angola was one of the first African countries to sign up for a resource-for-infrastructure deal with China. However, due to certain issues, both sides are moving away from that model. In addition, China appears to be much more circumspect about big-ticket items as its own economy slows down.

Currently, Angola owes about USD 7.7 billion to China, which is backed by oil. For this new loan, oil would not be used as collateral. Angola’s treasury came under pressure when oil prices crashed in 2014, and debt service absorbed nearly half of government revenues. On the other hand, China now takes a close look at a project’s commercial merit and the repayment is structured based on the projected cash flow.

Among the Chinese financial institutions, the usual suspects are the China Development Bank and the China EXIM Bank. Sonangol CEO Sebastiao Martins declared that a high-level team plans to travel to Beijing to hold face-to-face negotiations in April 2026.

Angola aspires to be a regional refining hub and supply refined petroleum to the regional markets, including DR Congo, Zambia and South Africa. The project is historically significant as it marks a paradigm shift from resource-backed financing to project-based financing.