Angolan state-owned oil company Sonangol is in talks with several major banks to bridge the US$4.8 billion-funding gap for the Lobito refinery, a project around a decade in the making.
Despite being the second-largest crude oil exporter in sub-Saharan Africa, Angola currently imports around 80 percent of its refined product, reports Reuters. The country is working hard to reverse this trend and become a net exporter, building new refineries and revamping existing facilities.
The refinery in Lobito, an Atlantic port city key to the Lobito Corridor project, restarted development back in December 2023 after being stalled for almost a decade. While Sonangol is investing US$950 million of its own money, mostly for infrastructure like roads and offices, significant funding is still needed for the project, estimated at US$6.6 billion in total.
Joaquim Kiteculo, chief executive of Sonangol’s refining division, informed Reuters about the company’s search for funding on the sidelines of an energy conference in Cape Town. “We are not only dealing with Chinese banks, we are looking for other alternatives as well. We are confident the financing will be raised, and the refinery will go ahead.” Construction, he added, is expected to start next year.
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According to Kiteculo, Sonangal is in discussions with banks including the Industrial and Commercial Bank of China; French multinational bank Societe Generale; British multinational bank Standard Chartered and Afreximbank, Africa’s export-import bank.
China is already involved in the project, with China National Chemical Engineering (CNCE) serving as the construction and engineering contractor for the refinery. Previous reporting indicates that CNCE estimated 40 months for the construction period.
“Even though we are still dealing with funding issues, we expect to have the mechanical completion for the whole refinery” in early 2027, Kiteculo told Reuters. He also detailed an upgrade to Sonangol’s refinery in Luanda, carried out in partnership with Italian oil and gas company Eni, which should increase output from 65,000 barrels per day (bpd) to 120,000 by 2028. The partners are also exploring the possibility of a separate biorefinery targeting sustainable aviation fuels.The Lobito refinery, once completed, will be Angola’s largest, churning out 200,000 bpd. “We are sure we are going to become one of the major exporters to Africa, including South Africa which is a big consumer market,” Kiteculo noted at the Cape Town event.
