Kiir says China to loan South Sudan $8 billion

April 28,2012 (JUBA) – South Sudan’s president Salva Kiir has described his recent visit to China as “positive” and said China has agreed to loan South Sudan US$8 billion for infrastructure development.

Speaking at a press briefing on Saturday, the government spokesman, Barnaba Marial Benjamin, on described the visit as a “successful mission” as Kiir has secured funding for infrastructure from China. He said China has agreed to lend South Sudan the money to support the implementation of “development projects”.

Kiir cut short a visit to China on Friday due to “domestic issues” according to a Chinese official. During the trip China was reluctant to fund the alternative pipeline which Juba is keen to begin construction.

Juba strongly denied accusations that growing dissent in Kiir’s ranks prompted his early return.

One of the key issues which has seen the dramatic deterioration in the relationship between Juba and Khartoum has been use of the pipeline which takes oil from land-locked South Sudan to the coast of its northern neighbour.

In reaction to Khartoum’s alleged confiscation of US$815 million of South Sudan’s oil in lieu of the oil transit fees demanded by Khartoum which Juba regarded as extortionate, Juba shut-down the pipeline. With South Sudan’s main revenue stream now on hiatus, the funding for the construction of an alternative pipeline is pro-actively being sought.

South Sudan has been exploring alternative pipelines to Kenya and Djibouti. However, with depleted oil reserves, Juba’s bargaining power with regards to oil infrastructure investment has been diminished.

According to Marial, China will be investing in “roads, bridges, hydropower, agriculture and telecommunications projects within the next two years”.

South Sudan’s deputy defence minister, Majak D’Agoot, commended Kiir’s trip to China and said South Sudan should “establish strong ties” with the “economic giant”.

D’Agoot said China has a huge interest and presence not only in South Sudan and her neighbouring Sudan but also in East Africa as region and as a continent at large.

China is keen for Juba to find a peaceful resolution to the conflict with Khartoum as it has interests to protect in both countries.

“The urgent task is to actively co-operate with the mediation efforts of the international community and halt armed conflict in the border areas,” the Chinese president Hu Jintao, said on Chinese state television.

(ST)