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China has inked several green infrastructure deals with African countries at its triennial summit in Beijing, making the energy transition a focal point in the $50 billion it has pledged to the continent.
The three-day Forum on China-Africa Cooperation (FOCAC) summit, which began on Sept. 4, has seen Beijing unveil a series of major partnerships with African countries in areas including supply chains for key minerals required to develop green technologies including electric vehicles.
Chinese President Xi Jinping, in a speech on Thursday, said his country will provide more than $50 billion in financial support to Africa over the next three years. This is up from a $40 billion commitment made at the last FOCAC held in Dakar, Senegal in 2021 but down from the $60 billion committed in 2018, the last time it was held in Beijing. At the US-Africa Leaders Summit hosted by the White House in December 2022, the Biden administration promised a total of $55 billion in a mix of existing and new deals with African countries.
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China on Wednesday signed a memorandum of understanding (MoU) with Zambia and Tanzania to modernize the Tazara railway which runs from central Zambia and terminates at the port of Dar es Salaam in Tanzania. The move would establish an alternative cargo route for the transportation of copper and cobalt from Zambia via the Indian Ocean and will be rivaling the US-backed Lobito Corridor project which terminates at Angola’s Lobito port on the Atlantic coast.
Nigeria’s government signed an agreement with China’s Mutual Commitment Group to assemble electric tricycles in Nigeria. The firm will also establish a training and testing center in Nigeria for solar and other renewable energy technologies.
China and South Africa also announced plans to expand cooperation in renewable energy, energy storage, transmission and distribution. And, in a joint statement, they said they would co-host a new energy investment conference.
Step Back
Chinese manufacturers are looking to Africa to offload stocks of solar panels, batteries, EVs and other green technologies amid mounting export restrictions on entering Europe and the United States.
And, as Beijing cuts down on lending for big infrastructure projects, its narrowed focus gives more prominence to green energy sectors in which it has invested heavily in recent years.
China committed $4.6 billion in new loans to African countries in 2023, according to data from Boston University’s Global Development Policy Center. The figure represented an increase from 2022 and the first annual increase since a 2016 peak, but it was still less than half of what was committed annually between 2013 and 2018. Notably, about $500 million of Chinese loans to African countries in 2023 went to hydropower and solar projects.
The View From ANGOLA
Angola is pushing Beijing to increase its financing for the country to import more Chinese-made green technologies, including solar panels and electric cars.
In the run up to FOCAC, Angola’s Finance Minister Vera Daves De Sousa told Reuters that it was considering competing bids from Europe and China to develop and diversify its economy in exchange for access to its market.
“We will buy more solar panels from Europe because the financing is coming from there,” Daves de Sousa explained on Tuesday.
While the oil and mineral rich nation has been the continent’s largest beneficiary of Chinese loans over the past decade, it is also looking to replace the debts with more “private-sector engagement and through public-private partnerships”.
“We need to think outside the box, because the plain vanilla solution of ‘you give me money, I’ll give you collateral’ is done,” she said.