China’s loans to Sub-Saharan Africa projects rose a bit last year, report finds
- Chinese lenders advanced US$3.3 billion in 2020, a slight increase from 2019’s US$2.2 billion, according to Baker McKenzie
- Lending is still sharply down from 2017, when Chinese banks lent US$11 billion to African infrastructure projects
China’s lending to Sub-Saharan Africa energy and infrastructure projects rose slightly in 2020, though deal values remain well below their 2017 peak, a new report shows.
Chinese lenders advanced US$3.3 billion in 2020, a slight increase from 2019’s US$2.2 billion, according to the report from the multinational law firm Baker McKenzie, New Dynamics: Shifting Patterns in Africa’s Infrastructure Funding, which analyses new data from IJ Global.
In 2017, Chinese banks lent US$11 billion to African infrastructure projects, which dropped sharply to US$4.5 billion in 2018, tracking a general trend of the more cautious approach Chinese lenders are taking in their dealings with African countries.
Despite the slight increase last year, Simon Leung, a Baker McKenzie partner in Hong Kong, said there had been a slowdown in the number of infrastructure deals from China.
“In the short term, we expect to see more targeted lending – fewer projects of a higher quality using sophisticated structures – and new finance options, such as factoring, used to deploy Chinese capital into the region,” Leung said.
