Reconstruction talks begin for Sudan even as fighting still rages on

The EU is starting to talk about reconstruction in Sudan, but the war is nowhere close to ending. The EU Delegation to Sudan hosted its first meeting with Sudanese private sector representatives in Cairo last week to discuss leveraging private enterprise for economic recovery. The EU envisions Sudanese businesses as the engine for post-war development, but addressing political instability, volatile exchange rates, and crumbling infrastructure would be key to reverse European capital flight, Yacine Hichem Tekfa, the EU delegation’s deputy head, said.

The stakes are immense: After more than three years of a conflict between the Sudanese Armed Forces (SAF) and the Rapid Support Forces (RSF), rebuilding Sudan’s ruined infrastructure will require an estimated USD 300 bn for Khartoum alone, and USD 700 bn for the rest of the country, according to Sudanese authorities. About 60% of the country’s electricity infrastructure is now destroyed, leaving Sudanese people with severe and prolonged power outages at a time when humanitarian needs are staking up, the country’s energy minister said earlier this week.

The war, meanwhile, grinds on despite efforts for a political settlement. The epicenter of fighting has shifted to Kordofan, where reports suggest a troop surge around El-Obeid — a city of 500k — raising fears of another humanitarian crisis similar to El Fasher’s from last October. Drone strikes alone killed over 1k civilians in the first five months of 2026. So far, the conflict has displaced close to 14 mn people — the world’s largest displacement crisis — and the country is now effectively split in two.

The split Sudan is facing isn’t just territorial. The RSF currently recognizes banknotes issued before 2024 in the territories it controls, raising worries that Sudan might be seeing the emergence of a two-currency system. This comes as competing governments work on building separate financial systems, with parallel central banks and governments, each recognizing different banknotes based on their date of issuance, Asharq Al Awsat reports.

Adding to the infrastructure collapse, Sudan also faces severe fiscal pressure. Traditional revenue streams like taxes and customs have collapsed, and oil production — historically accounts for some 20% of the country’s export revenues — almost halved to just 24k bbl / d last year. Meanwhile, China canceled USD 50 mn of sovereign debt and signaled openness to future grant-based cooperation, but the waived amount is a drop in the ocean compared to the government’s staggering external debt, which was most recently estimated at USD 69 bn in 2023.

IN CONTEXT- The gap between Khartoum’s demand for unconditional RSF surrender and the international community’s push for a negotiated settlement looks as wide as ever. Cairo convened a four-party meeting with Saudi Arabia, Turkey, and the US on 20 June, with a Sudanese delegation meeting separately with US Senior Adviser Massad Boulos and Turkish FM Hakan Fidan on the sidelines. But the Sudanese military arrived carrying the same roadmap it has pushed for months: Full RSF disarmament, restoration of state control across all territory, and no framework that treats the SAF and the RSF as equals. Al-Burhan underlined the point days later, publicly ruling out any negotiations unless the RSF disarms.