China takes the lion's share in electrifying Africa with ECA finance

(Global Construction Review, London, 8 July 2016) Chinese companies are playing huge role in bringing electricity to sub-Saharan Africa and can take credit for 30% of new capacity in the region, according to a study published this week by the International Energy Agency (IEA). While more than 635 million people still live without electricity there, Chinese companies channeling state funds into all different types of power stations will have brought light and power to around 36 million people by 2020. The sums are vast: the IEA finds that China invested around $13bn between 2010 and 2015 in power projects, as China’s contribution dwarfs that of any other non-African country. There is also a long-term strategy behind China’s powering of Africa. The industrialisation and economic development of the region is seen by Chinese stakeholders as important for eventually bolstering Chinese exports to the region, the IEA says. China’s approach to development assistance differs from OECD countries. For example, China is not covered by the Arrangements on Officially Supported Export Credits, which guides OECD countries in export credit financing. In the 2010-15 period, loans, credits and foreign direct investment from China into the sub-Saharan power sector amounted to around $13bn, around one-fifth (20%) of all investments in the sector. Most of this financing comes from the Export-Import Bank of China.