The China in Africa Podcast The New Realities About Chinese Development Finance in Africa
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May 2, 2025 Yunan Chen, a research fellow at ODI Global, and Teal Emery, founder of Teal Insights, delve into the transformation of Chinese development finance in Africa. They discuss how China has shifted from massive bilateral loans to diverse co-financing models, illustrated by the recent Kenyan railway deal. The duo emphasizes the importance of new financial strategies for sustainable development and the growing interest in collaborative partnerships, impacting Africa’s infrastructure landscape significantly as it navigates the era of green energy.
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Shift in Chinese Development Finance
- Chinese overseas development finance has shifted from mega bilateral policy bank loans to diversified co-financing models.
- This trend responds to de-risking needs to balance external and domestic risks while expanding greener financing.
Co-financing Enables Risk Sharing
- Co-financing often involves sharing financial risk through syndicated loans among Chinese policy banks, commercial banks, and international lenders.
- This allows better risk management and utilization of due diligence capabilities from diverse partners.
Chinese Banks Partner Locally
- Chinese state-owned commercial banks like ICBC collaborate extensively with international and African partners in co-financing.
- The ICBC-Standard Bank partnership exemplifies strategic local collaboration to facilitate Chinese investments in Africa.