Angola Negotiates $500 Million Societe Generale Line of CreditColin McClelland
Angola, sub-Saharan Africa’s third-largest economy, is negotiating a $500 million line of credit with Paris-based Societe Generale SA as it struggles to cope with plunging oil revenue.
President Jose Eduardo dos Santos issued a decree April 8 approving a framework agreement for the Finance Ministry to secure the loan, according to the government gazette. The money will be used for public investment projects, state-run Jornal de Angola reported Thursday.
The continent’s second-largest crude producer is also negotiating loans with Goldman Sachs Group Inc. and London-based Gemcorp Capital LLP, each for $250 million, and with Spain’s Banco Bilbao Vizcaya Argentaria SA, for 500 million euros ($537 million). The African Development Bank is funding water and sanitation works for $124 million and the World Bank is due to supply $500 million in May for agricultural projects.
Angola, a member of the Organization of Petroleum Exporting Countries, cut this year’s budget by a quarter last month and reduced investment spending by a third after crude lost about half its value since June. Dos Santos said last month that some infrastructure projects would be delayed.
The kwanza has fallen to a record and analysts including Gareth Brickman at ETM Analytics have said the government will have to formally devalue the currency to attract interest in a planned $1.5 billion Eurobond. Moody’s Investors Service, Standard & Poor’s and Fitch Ratings have cut their outlooks or ratings on the country in recent weeks.