China Eximbank provides $736 million loan for Phase 1 of 392 km Juba-Terekeka-Yirol-Rumbek Road Construction Project (Linked to Record ID#59617)

China Eximbank provides $736 million loan for Phase 1 of 392 km Juba-Terekeka-Yirol-Rumbek Road Construction Project In July 2016, South Sudan’s Foreign Minister Deng Alor Kuol made an official visit to China and requested a $1.9 billion China Eximbank loan to develop oil fields and rebuild a road between Juba, the capital, and Wau.

Then, in August 2016, Mawien Makol Arik, the Spokesman for South Sudan’s Ministry of Foreign Affairs announced that China Eximbank was ‘working on this loan’.

Then, in 2018, China Eximbank and the Government of South Sudan signed an oil-backed lending framework agreement to finance multiple road construction projects that would link the capital city of Juba to the remote countryside.

Shandong Hi-Speed Group Co., Ltd (SDHS) was identified as the general EPC contractor responsible for the implementation of these projects.

Then, on March 25, 2019, SDHS, China Eximbank, South Sudan’s Ministry of Finance and Planning, and South Sudan’s Ministry of Petroleum signed a multi-party agreement.

Under the terms of the multi-party agreement, the Government of South Sudan agreed to deposit the proceeds from the sale of 30,000 barrels per day (bpd) of crude oil into a lender-controlled escrow (special) account in order to meet its repayment obligations to China Eximbank and facilitate payments to SDHS for work performed on EPC contracts for road projects.

At that time, the Government of South Sudan was producing 140,000 bpd.

Then, on May 7, 2019, the Government of South Sudan issued a resolution (No.46/2019) in which it identified the nine road projects that it intended to finance through its so-called ‘oil-for-roads’ program.

The Government of South Sudan then authorized at least four oil revenue transfers to the oil-for-roads program: a transfer in Fiscal Year 2019-2020 (July 1, 2019-June 30, 2020) worth approximately $82,000,000, a transfer in Fiscal Year 2020-2021 (July 1, 2020-June 30, 2021) worth approximately SSP 45 billion ($345,600,000), a transfer in Fiscal Year 2021-2022 (July 1, 2021-June 30, 2022) worth approximately SSP 184 billion ($1,413,200,000), and a transfer in Fiscal Year 2022-2023 (July 1, 2022-June 30, 2023) worth approximately SSP 238.2 billion ($1,829,376,000).

The cumulative estimated value of these four oil revenue transfers is $3,670,176,000. According to an April 2021 report delivered to the U.N.

Security Council, the Government of South Sudan had financed four road construction projects (via four separate commercial contracts worth $3.87 billion through the ‘oil-for-roads’ program as of early 2021.

The purpose of the China Eximbank-financed Juba-Terekeka-Yirol-Rumbek Road Project (also known as the Juba-Bahr el Ghazal Highway Project), which is captured via Record ID#59619, is to construct a 392 kilometer stretch of National No. 1 road — with 11 modern standard bridges, 35 box culverts, 300 pipeline culverts, and 21 viaducts — that runs from Juba to Terekeka and Mingkaman and then to Yirol and onward to Rumbek.

The road consists of 4 sections: (1) Juba-Terekeka; (2) Terekeka-Mingkaman, (3) Mingkaman-Yirol, and (4) Yirol-Rumbek.

On March 25, 2019, Shandong Hi-Speed Group Co., Ltd (SDHS) and the South Sudan Ministry of Roads and Bridges signed an $711 million commercial (EPC) contract for the 392 km Juba-Terekeka-Yirol-Rumbek Road Construction Project. The EPC contract was rescoped in 2022 and its value increased to $736,533,725.

At the time of the rescoping, Michael Makuei Lueth, South Sudan’s Minister of Information and Broadcasting, said that ‘[u]pon thorough studies, [a] committee discovered that there were some items which were missing, bridges were missing, and crossing points were also missing including compensation for those who will be affected by the construction of the road.’ The Government of South Sudan reportedly borrowed $711 million from China Eximbank to facilitate the implementation of this project.

SDHS is the general EPC contractor responsible for project implementation. On December 13, 2014, a formal groundbreaking ceremony for the project was held. However, in July 2016, the project was temporarily suspended after a resurgence of violence in South Sudan.

The project recommenced implementation on October 11, 2019, and it was expected to take 36 months from that date to reach completion (October 11, 2022).

Construction was temporarily suspended in June 2020 over quality concerns – after a heavy downpour swept away some unpaved sections of the road on May 23, 2020.

A group of South Sudanese lawyers threatened to sue the Ministry of Roads and SDHS for ‘shoddy work’ and demanded that the commercial contract for the Juba-Terekeka-Yirol-Rumbek Road Construction Project be made public.

The Chinese Ambassador to South Sudan, Hua Ning, subsequently said that SDHS would make the necessary changes to improve the quality of the highway.

At that time, South Sudan Minister of Roads and Bridges Simon Mijok Mijak referred to the local subsidiary of SDHS (Shandong Hi-speed Nile Investment and Development Co., Ltd,) as ‘an inexperienced company.’ Benjamin Manyiel, the head of Liberty Engineering, a consultancy firm appraising the work on the road project, also said that delays by the Government of South Sudan to hire a consultancy firm slowed down implementation.

After undertaking a review of the 392 km Juba-Terekeka-Yirol-Rumbek road project that lasted about three months, the Government of South Sudan granted SDHS permission to resume work in January 2021.

One month earlier (December 2020), SDHS and the Government of South Sudan’s Ministry of Road and Bridges came to agreement that 80 percent of the project workforce should be sourced locally to ensure compliance with South Sudan's Labor Act of 2017.

The project’s first phase — a 63 km road section from Juba to Terekeka — had achieved a 75% completion rate as of November 2021.

Then, in October 2022, Simon Mijok Mijak, the national minister of roads and bridges, announced that ‘we are determined to deliver this project to the people of South Sudan.’ He also announced that the project was expected to reach completion within three years (October 2025).

Ma Qiang, the Chinese Ambassador to South Sudan, also announced in October 2022 that the construction of the ‘first section’ of the 392 km Juba-Terekeka-Yirol-Rumbek road — a 63 km section from Juba to Terekeka — had reached completion.

He noted that ‘[t]his road is of high standard and quality, and it’s the first modern highway in this country; it tends to take only 40 minutes to drive from Juba to Terekeka.’ The road's first section was officially inaugurated and opened to traffic in December 2022.

Then, in May 2025, China's Ambassador to South Sudan announced that construction of the remaining sections of the road had was halted due to overdue payments.

There has been some controversy about the way in which the Government of South Sudan will meet its repayment obligations to China Eximbank.

In May 2019, South Sudan's Undersecretary in the Ministry of Petroleum reported that his government had completed the shipment of the first cargo of crude oil to fund the construction of the Juba-Terekeka-Yirol-Rumbek Road Project.

Then, in June 2019, the Government of South Sudan revoked an earlier decision in which it entrusted the Ministry of Petroleum with responsibility for depositing funds in the China Eximbank-controlled escrow account. It turned this responsibility over to the country’s central bank, the Bank of South Sudan.

South Sudan’s Information Minister, Michael Makuei, at the time that ‘the [proceeds] received from the sale [of oil] will go directly to the Central Bank, the Central Bank will then transfer the money to Exim Bank in China.

This is to avoid any crooked dealings in the oil industry.’ Makuei said the decision would take the responsibility of dealing with finances away from the Ministry of Petroleum: ‘The Ministry of Petroleum is not a spending agency but a revenue-generating institution.’ Then, on December 19, 2019, when South Sudan's Ministry of Finance released its FY 2019-2020 Approved Budget Book, it acknowledged that 'the necessary condition of 30,000 barrels per day deduction [...] has fundamentally changed [...] short term conditions for the South Sudan economy’ and that the 30,000 barrels per day deduction ‘creates large deficits in the budget and in the balance of payments, which has to be met by cuts in imports and public expenditure […].’ A 2021 report published by International Crisis Group claimed that the Government of South Sudan could only ‘afford to fund the project with 10,000 barrels per day’ and its ‘opaque [oil-backed loan agreement] shields substantial revenues from oversight and has already led to scandal, including accusations of mismanagement and corruption.’ President Kiir sacked his Minister for Presidential Affairs, Mayiik Ayii Deng, in June 2020 due to alleged mismanagement of the Juba-Terekeka-Yirol-Rumbek Road Construction Project amid an uproar over the poor quality of road construction.

However, President Kiir reappointed Mayiik Ayii as foreign minister in September 2021.

As of October 2022, reports suggest that the Government of South Sudan was honoring its commitment to sell 30,000 barrels of crude oil per day to China in order to facilitate the continued implementation of the 392km Juba-Terekeka-Yirol-Rumbek Road Project.

Another source of controversy is the fact that South Sudan President Salva Kiir Mayardit set up a ‘China desk’ within the Office of the President to oversee the project and the broader oil-backed lending framework agreement with China Eximbank. According to a 2021 report from a Panel of Experts on South Sudan prepared for the U.N.

Security Council, ‘[t]he Office of the President has directly managed the negotiation and implementation of the road construction projects since the Council of Ministers agreed, in May 2019, to allocate 30,000 barrels of crude oil per day for the development of infrastructure […].

Current and former government officials have told the Panel that, because the Office of the President created a special “desk” to manage the projects directly, there has been no government oversight.

The normal review of the technical aspects of the roads has not been conducted by the Ministry of Roads and Bridges, and financial transparency with regard to payments for the projects has been lacking from the Ministry of Finance and Planning’.

Descriptions of the 9 additional road projects financed via — or scheduled for financing — via the Government of South Sudan’s oil-for-roads program are provided below: (1) The Rumbek-Bentiu-Malakal Road Project: The purpose of the project is to construct a road from Rumbek to Malakal via Bentiu. (2) The Nadapal-Kapoeta-Torit-Juba-Bor-Ayod-Malakal-Renk Road Project: The purpose of this project is to construct a 539 km road from Nadapal to Renk via Kapoeta, Torit, Juba, Bor, Ayod, and Malakal.

The Government of South Sudan awarded a three year, $1.04 billion commercial (EPC) contract to ARC Resources Corporation Limited (ARC Resources) for the 204 km Juba-Bor-Malakal road segment based on a single source bid that was not publicized.

ARC Resources reportedly failed to submit a feasibility study on the potential social and environmental impacts of the road project. In March 2020, ARC Resources began construction. As of late October 2020, less than 20 km of paved road had been completed.

Based on the terms of the contract and confidential sources familiar with the project, ARC Resources received upfront financing for the project that has not been reflected in the Ministry of Finance and Planning budget figures.

A United Nations Security Council Panel of Experts has reviewed confidential documentation that indicates that ARC Resources received an advanced payment of at least $100 million for the project.

The Panel of Experts also reviewed documentation confirming that, in February 2020, the Government of South Sudan awarded a separate oil-backed contract — without a competitive tender — for the construction of the 365 km Juba-Torit-Nadapal road section to Winners Construction Company Ltd. Construction started on the Juba-Torit-Nadapal road in August 2020.

Then, in late 2021, the U.S.

Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced that it had ‘designated ARC Resources Corporation Limited (ARC Resources) and Winners Construction Company Limited (Winners) for being owned or controlled by Benjamin Bol Mel (Bol Mel), an individual included in the Annex of E.O. 13818 in December 2017.’ In a public statement, it said that ‘Bol Mel previously oversaw ABMC Thai-South Sudan Construction Company Limited (ABMC), which was awarded contracts worth tens of millions of dollars by the Government of South Sudan (GoSS) and allegedly received preferential treatment from high-level GoSS officials in a non-competitive process for selecting ABMC to do roadwork throughout South Sudan.

ARC Resources is linked to ABMC, and has been used by senior members of GoSS for laundering money.’ It further claimed that ARC Resources and Winners have been used to evade sanctions and travel restrictions on Bol Mel, and have been awarded noncompetitive and substantial oil-backed contracts from the GoSS for road construction.

It added that ‘ARC Resources and Winners are designated pursuant to E.O. 13818 for being owned or controlled by, directly or indirectly, Bol Mel, a person whose property and interests in property are blocked pursuant to E.O. 13818.’ (3) The Juba-Mundri-Maridi-Yambio-Tambura (Tamura)-Wau Road Project: This project involves the construction of an 890 km road from Juba to Wau via Mundri, Maridi, Yambio, and Tambura (Tamura).

The ultimate objective of the project is to connect Juba with the other States of Western Equatoria State, Western Bahr-el-Ghazal including Lakes State.

The project will seek to tarmack the Juba, Mundri-Yambio (WES) and Yambio-Wau (WBS) Road and Mundri-Rumbek in Lakes State. ARC Resources Corporation Limited (ARC Resources) is the contractor responsible for project implementation.

A groundbreaking ceremony for this project took place on June 22, 2022. (4) The Kaya-Yei-Juba Road Project: The purpose of this project is to construct a 219 km road from Kaya to Juba via Yei.

Sanco, an Egyptian construction company, and ARC Resources Corporation Limited (ARC Resources) are reportedly responsible for project implementation. The project was halted in mid-2020 due to a decline in oil prices.

In September 2022, Aggrey Cyrus Kanyikwa, Yei River County Commissioner, complained that the national government had still not released the funds necessary to complete the project. (5) The Sobat Bridge and the East-West Bridge Near Malakal in the Former Greater Upper Nile Project: The purpose of this project is to construct Sobat Bridge and the East-West Bridge near the city of Malakal. (6) The Wau-Raga Road Project: The purpose of this project is to construct a road from Wau, the capital of Western Bahr el Ghazal State (formerly Wau State), to the town of Raga (within Raja County in Western Bahr el-Ghazal State). (7) The Gogrial-Twic-Abyei-Bentiu Road Project: The purpose of this project is to construct a road from Gogrial to Bentiu via Twic and Abyei. (8) The Wau-Aweil (Awerial) Road Project.

The purpose of the project is to construct a stretch of National No. 1 road that runs from Wau (in Western Bahr el Ghazal State) to Aweil (Awerial). The estimated cost of this project is $750 million. (9) The Western Equatoria-Raja Road Project. The purpose of this project is to construct a 451 km road from Western Equatoria to Raja Road.

More research is needed to determine if any of these projects were financed by China Eximbank (through the multi-party agreement or otherwise).