The value of Chinese loans to energy and infrastructure projects in Africa almost trebled between 2016 and 2017 to nearly $9-billion and the impact of this lending is increasingly visible in Africa, law firm Baker McKenzie said at the sidelines of a Brics summit.
Baker McKenzie, participating at the July 25 to 27 summit in Johannesburg which has drawn hundreds of delegates from Brazil, Russia, India, China and South Africa (Brics) said loans had risen from $3-billion to $8.8-billion, with policy lenders China Development Bank and China Exim particularly active in helping bridge Africa's infrastructure gap.
Almost half of the $19-billion of Chinese outbound loans poured into infrastructure projects in sub-Saharan Africa since 2014 were made in 2017.
The research by Baker McKenzie and IJGlobal, the leading trade publication for infrastructure projects, is drawn exclusively from fully financed projects and excludes recent announcements of government funding commitments.
At a Brics Energy event which preceded the main summit, Baker McKenzie head of energy, mining and infrastructure Kieran Whyte said President Xi Jinping’s recent tour of African countries ahead of the summit was proof of the increasing interdependence of the maturing but still fast growing Chinese economy and developing economies in Africa.
This week, China pledged to invest $14.7-billion in South Africa and to grant loans to state owned enterprises Eskom and Transnet.
Recent examples of large power deals in Africa where at least half of the finance was provided by Chinese lenders include the $5.8-billion Mambila Hydropower Plant in Nigeria, Kenya's Lamu coal-fired power plant, the Medupi coal-fired power plant in South Africa and Zambia's $1.5-billion Kafue Gorge Lower Hydro Power Plant.