SinoSage
Energy Finance and Institutional
Frameworks
To facilitate these complex infrastructure and energy investments, eastern Libya has approved the establishment of the Libyan Bank for Energy and Mining. Its director, Juma Jaballah, has disclosed plans to bring in substantial Chinese capital and is currently awaiting Central Bank of Libya approval for a SWIFT code to begin international transactions.
This development underscores China’s preference for building institutional foundations alongside infrastructure. The bank would serve as the financial conduit for refinery construction, port upgrades, and associated service contracts. It is expected to play a pivotal role in easing capital flows and ensuring compliance with international norms, even as Libya remains politically divided.
Kerui Petroleum, a major Chinese oil services firm, has already begun preliminary studies for the Tobruk refinery under contract from Benghazi’s Ministry of Investment. This underscores the operational readiness of Chinese firms to move forward with detailed planning, even as geopolitical approvals remain pending.
In support of this growing partnership, a high-level Libyan delegation—led by one of Field Marshal Haftar’s sons and representing the Fund for the Development and Reconstruction of Libya—recently traveled to China to advance multiple avenues of cooperation. The delegation held meetings with leading Chinese companies, including Huawei and the China Energy Engineering Corporation (CEEC), to discuss a wide array of projects spanning telecommunications, energy infrastructure, and logistics.
Notably, according to our sources inside Libya, Huawei is already leading the rollout of a dedicated telecom network in eastern Libya through a joint venture with local authorities, with the system currently in the testing stage. These developments highlight China’s deepening multi-sector engagement in Libya’s east.
Link to Africa: Roads to Chad and Sudan
China’s vision for Libya transcends national borders. With Africa’s population set to double by 2050, Beijing aims to deepen trade routes that bypass maritime chokepoints like the Suez Canal. Tobruk’s transformation includes plans to extend highway and logistics corridors southward into Chad and Sudan. These overland routes would allow Chinese-manufactured goods to reach African interior markets quickly and cost-effectively.
In return, China would gain access to African raw materials—oil, rare earth elements, and agricultural goods—transported north to Tobruk for processing and export. This multimodal corridor strategy mirrors similar Chinese projects in East Africa, such as the Mombasa-Nairobi-Addis Ababa corridor.
Historical and Geopolitical Context
China’s interest in North Africa is not new. Since the 1960s, Beijing has maintained a presence in Africa, supporting liberation movements and later pivoting to infrastructure and trade. Libya, once marginalized due to internal conflict, is now reemerging as a candidate for strategic partnership. China’s non-interference policy and track record of dealing with non-Western regimes appeal to Haftar’s administration, which remains internationally unrecognized.
Importantly, the eastern region of Libya—historically known as Cyrenaica—played a pivotal role in the Allied campaign during World War II, serving as a key staging ground in the fight against Nazi Germany and Fascist Italy. The region’s legacy as a frontline in the defense of liberal democracy underscores the strategic importance of its alignment today. In the context of growing Chinese and Russian activity, many Western analysts argue that restoring Libyan unity under a government aligned with Western institutions is not only a matter of regional stability but a vital component of broader transatlantic security.
Meanwhile, Libya’s fractured governance deters Western investment and engagement. The United States has prioritized counterterrorism and migration control over state-building in Libya, while the EU remains divided over the best approach. The absence of cohesive Western policy has opened the door to alternative actors—including Russia, Turkey, and increasingly, China.
Implications for European Energy Security
The implications of this Chinese pivot toward Libya for European energy security are profound. Europe’s ongoing energy diversification efforts, especially since the Russia-Ukraine war, have made the continent more reliant on alternative sources from the Middle East and North Africa. If Beijing gains control over a large-scale refinery in Tobruk and the associated port infrastructure, it will possess significant influence over supply chains feeding Europe.
This is not just about access to oil. With the ability to refine, store, and transport energy products directly from North Africa to Europe, China could dictate pricing, volume, and prioritization in times of crisis. Such leverage would challenge Europe’s energy autonomy and increase its dependency on Beijing at a time when the transatlantic alliance is already under strain.
Additionally, China’s control over container logistics through Tobruk would provide Beijing with leverage over not just energy, but manufactured goods and critical technologies. The dual-use airport, coupled with surveillance and digital infrastructure, could also serve intelligence and military interests.
Strategic Consequences and Outlook
Should Haftar approve the Chinese proposals, Libya would become the western anchor of a vast, China-led logistical and energy network spanning the Indian Ocean, the Red Sea, and the Mediterranean. The Tobruk refinery and associated infrastructure would give Beijing new leverage over European energy markets, especially as the EU seeks to diversify away from Russian gas.
Moreover, the dual-use nature of Tobruk’s upgraded airport and port could extend Chinese naval or intelligence capabilities into the Mediterranean. This possibility has already raised concerns in some NATO circles, although no formal opposition has been articulated.
If successful, China’s Libya strategy would reshape Eurasian supply chains and trade flows. It would also signal a shift in the balance of soft power and strategic influence in North Africa, with potentially profound implications for Europe’s energy security and geopolitical autonomy.
Libya may appear a fragile and fractured state, but to Chinese planners, it represents a gateway—one with the potential to tie Africa, Europe, and Asia together under a new global trade architecture led by Beijing.
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