Date: Sat, 19 Sep 2015 21:57:59 +0200
M&G Africa Reporter
US researchers claim that there are currently 3,030 active development projects in Africa, but will Asian country announce more in December?
According to the largest public database of Chinese development finance in Africa, researchers claim that there are currently 3,030 active projects in Africa. China is clearly racing to deliver on commitments made in 2012, when then-president Hu Jintao offered $20 billion in loans to African countries, doubling its previous pledge.
But with the country fighting to stay on its high-growth lane, this year’s Forum on China–Africa Cooperation that takes place in December in South Africa will be closely watched for how bad the malaise is.
READ: China’s investment in Africa isn’t what you think, and it’s not mostly with ‘rogue’ states
Ahead of that, using information from the database and other research, M&G Africa sought the biggest active development projects and deals between Africa and China, and which cost a minimum of $1 billion:
Coastal Railway, Nigeria
Amount: $12 billion
In 2014 China Railway Construction Corp signed a deal worth nearly $12 billion with Nigeria to build a railway along the West African nation’s coast—China’s largest single contract overseas. The coastal railway will stretch for 1,402km, linking Nigeria’s economic capital Lagos in the west with Calabar in the east.
READ: China firm inks $12bn Nigerian railway deal-its largest single overseas contract yet
Lagos-Kano railway project, Nigeria
Amount: $8.3 billion
In 2006, the China Civil and Engineering Construction Company (CCECC) won the contract for the 1,124-km Lagos-Kano standard gauge modernisation project. Due to funding issues it was recast for completion in segments. Contracts for it are now awarded in tranches. In December 2014 the first, the 186-km Abuja-Kaduna section was completed, done over three years and an estimated cost of $850 million.
Infrastructure for mines barter deal (Sicomines), DR Congo
Amount: $7.16 billion
On September 17, 2007 China and the DRC signed an agreement for a $9 billion loan deal from the Exim Bank of China. However, the loan was reduced to $6 billion in October 2009 because the IMF expressed concerns over the DRC’s national debt. The money was meant to improve Congolese infrastructure and to develop mines in the Mashamba basin, the Dima basin, the Dik Colline D syncline, and Kolwezi. In return, the Congolese state copper company Gécamines would concede a number of deposits containing up to 10.6 million tonnes of copper, of which approximately 6.8 million tonnes were confirmed. Gécamines also promised between 425,000 tonnes and 625,000 tonnes of cobalt and access to all other potential mineral substances.
Mini-City, South Africa
Amount: $7 billion
Chinese property group Shanghai Zendai is building a $7 billion mini city on the outskirts of Johannesburg in one of the largest real estate deals made by a Chinese company in South Africa. Chinese investor Shanghai Zendai heads the 1,600-hectare development called the Modderfontein New City project.
READ: China’s planned new economic ‘assault base’ into Africa seen as extremely ambitious
When completed it is expected to become a mini city with more than 100,000 residents. According to the developer’s founder, the aim is to turn the mini metropolis into the “New York of Africa”.
Joint Venture between China International Fund and Guinea, Guinea
Amount: $7 billion
On October 12, 2009, the China International Fund (CIF) signed an agreement with Guinea to create a holding company for investments in development projects. The project is worth $7 billion. The deal granted Guinea a 25% stake in the newly created Guinea Development Corporation (GDC). CIF and Sonangol (a parastatal that oversees petroleum and natural gas production in Angola) would split the remaining stakes. CIF was given the rights to explore any unexploited Guinean mineral and energy resources. In return, CIF would use some of its revenue to fund infrastructural projects proposed by the Guinean government. All iron ore and associated minerals zones that cover 7,000 square km would now fall under Chinese control. In bauxite and alumina, over 10,000 square km have been attributed to GDC Mining, Oil & Gas in the Gaoual, Lélouma, Télimélé, Koundara and Labé regions. It was also reported the partnership would fund hydro power projects.
Construction of oil refinery, Angola
Amount: $5.8 billion
On January 16, 2001, China announced that it would take part in the construction of a new oil refinery, Sonaref, in Lobito. The $3.5 billion project was planned to have the capacity to process 200,000 bbl/day. Sinopec, the sole funder of the project, expected the refinery to start operations in 2010. In May 2012, the refinery was still incomplete. An updated projection estimated production to start at 120,000 bbl/day in the refinery’s first stages and to eventually increase to 200,000 bbl/day.
Chad-Sudan Railway, Regional
Amount: $5.6 billion
In 2014, a $5.6 billion agreement was signed between China Civil Engineering Construction Corporation and Chad’s Transport Minister for the construction of a 1,344-km railway network. The first phase will link Abéché to André on the border with Sudan, and Moundou to Ngaounderé on the border with Cameroon. The second phase will connect Moundou with N’Djamena and connected Chad’s capital with border regions. The third phase will link Chad’s capital with Abéché and the fourth phase will link Abéché with Nyala, Sudan.
Cement plants, Regional
Amount: $4.34 billion
In 2015, Dangote Cement signed contracts worth $4.34 billion with China’s Sinoma International Engineering Co. to build cement plants across Africa, as Nigeria’s largest listed firm expands. The plants to be built in Cameroon, Ethiopia, Kenya, Mali, Niger, Nigeria, Senegal and Zambia, with another in Nepal, would add around 25 million tonnes to the company’s existing capacity of around 45 million tonnes.
Kenya standard-gauge railway
Amount: $3.4 billion
In February, work on the Kenya’s biggest investment in railway infrastructure since it gained independence from Britain in 1963 begun. The Export-Import Bank of China is funding 90% of the $3.8 billion railroad, which will connect Nairobi to Mombasa, East Africa’s biggest port. It’s scheduled to be completed by 2017.
Mepanda Nkua dam and hydroelectric station, Mozambique
Amount: $3.1 billion
On April 21, 2006, the Mozambican government signed a memorandum of understanding with the Export-Import Bank of China to finance the Mepanda Nkua dam and hydroelectric station on the Zambezi River in the province of Tete. The MOU also provided for funding for the construction of the Moamba-Major dam in Maputo province that will supply Maputo with drinking water.
Construction of railway from Khartoum to Port Sudan, Sudan
Amount: $1.38 billion
On February 28, 2007, after two years of negotiations, China Railway Engineering Group Co. Ltd. and China Railway Erju Co. Ltd. unit Transtech Engineering Corp signed a $1.154 billion contract with Sudan to construct a 762-km railway line to link Khartoum with Port Sudan. The Chinese government financed the project via export credits.
African textiles also attract Chinese money.
Capital rebuilding deal, Republic of Congo
Amount: $1.23 billion
China has signed accords with Congo-Brazzaville to present them with $1.225 billion to rebuild parts of Brazzaville that were destroyed by a deadly blast at a munitions depot in March 2012. The loan has a five year grace period, twenty year maturity, and 0.25% interest rate. Most of the funding will be used to rebuild areas flattened by the March 4 explosions in Mpila in the east of the city, $68 million will go towards developing Congo’s telecommunications network and another $75 million has been earmarked for building a road in the north of the country.
Mtwara-Dar Es Salaam Gas Pipeline, Tanzania
Amount: $1.03 billion
In 2012, Tanzanian Finance Minister, Dr. William Mgimwa, and the Deputy President of ExIm Bank, Mr. Li Jun, signed a loan agreement for $1.2 billion with a 33-year maturity and 2% interest rate. The loan finances the natural gas pipeline linking Mtwara gas field to Dar es Salaam. Before accessing the finances, Tanzania signed a contract with three Chinese companies for construction in July of 2012. The lines are over 500km in length and will help boost power supply to the capital city.
Thermal power deal, Zimbabwe
Amount: $1.1 billion
In July 2015, Zimbabwean company, PER Lusulu Power, signed a $1.1 billion agreement with the China State Construction Engineering Corporation (CSCEC) to build a 600-megawatt thermal power plant, a move expected to ease power cuts in the country.
Textile Complex, Egypt
Amount: $1.01 billion
In 2008, the National Bank of Egypt and China Africa Development Fund agreed on plans for the construction of a $1 billion textile complex in the southern province of Suhaj in Upper Egypt. The complex covers an area of 3 km square and consists of at least 100 textile mills, creating 90,000 new jobs.
Deep sea port, Cameroon
Amount: $1 billion
Cameroon signed a deal with the China Harbor Engineering Company Ltd for the country’s only deep-sea port, which can accommodate the larger inter-continental trading ships. The contract value for the first phase was set at $568 million, of which 85% was provided as a preferential loan from China’s Export-Import Bank and 15% was paid by the Cameroonian government. Final construction costs were estimated to be $1 billion.
*All amounts are USD 2009