World
China, United States Battle for Influence in African Infrastructure Lending
New research from global law firm Baker McKenzie with data provider, IJGlobal, shows that development finance lending from state-backed institutions is the most important component of infrastructure funding in sub-Saharan Africa.
The battle for influence on the continent between Development Finance Institutions (DFIs) and Export Credit Agencies (ECAs) from China and the United States is set to heat up over the next decade in a fierce competition that could help the continent bridge its vast infrastructure gap more quickly than expected.
The report shows that survey respondents attribute the significance of DFI-lending in sub-Saharan Africa to the growing demand for infrastructure development (39%) and to the lack of availability of commercial funding for projects in the region, due to the perceived high risks associated with these investments (34%). The report further notes that China put US$8.7 billion in sub-Saharan Africa infrastructure projects in 2017 alone, while the US recently set up a new US$60 billion agency to invest in developing countries.
The report, ‘A Changing World: New trends in emerging market infrastructure, surveyed 434 executives from Export Credit Agencies (ECAs), Development Finance Institutions (DFIs), commercial banks and sponsors.
Wildu du Plessis, Head of Africa at Baker McKenzie in Johannesburg, notes that the infrastructure investment landscape in sub-Saharan Africa has changed beyond recognition in the past decade.
“The continent still suffers from massive under investment. According to African Development Bank (AfDB), poor infrastructure has cost the continent a cumulative 25% in growth in the last two decades. The World Bank estimates that the continent needs more than US$90 million per year to begin bridging the infrastructure gap. However, in many African countries governance has improved, which has accelerated growth and will make investment easier. Africa’s GDP is expected to grow to 3.7 per cent in 2019 and countries such as Ethiopia and Ghana, for example, have enjoyed some of the world’s fastest growth recently.”
The report shows how China has targeted sub-Saharan Africa in recent years, both in the context of its need for natural resources and as part of the Belt and Road Initiative (BRI). Chinese policy banks loaned $19 billion to energy and infrastructure projects in the region from 2014-2017, almost half of which was in 2017. China Exim Bank was the largest policy lender in Africa in the period 2008 – 2017 and China Development Bank was the second largest bilateral investor in this period, lending nearly as much as World Bank-linked multilateral agency International Finance Corporation.
“Against a background of a global geopolitical shift in trade relations, China has noted that it is looking to work with African countries in a participative and inclusive way. Chinese president Xi Jinping’s tour of Africa earlier this year is proof of the increasing interdependence of the maturing but still fast growing Chinese economy and developing economies in Africa. The relationship is seen to be mutually beneficial, China needs natural resources and new markets for its exports, and Africa needs funding for infrastructure investment which China is providing,” notes du Plessis.
Despite the prominence of Chinese investment, the US is also seen as a major player in infrastructure investment in Africa. Some 32 % of survey respondents said that they expected US-based DFIs and Export Credit Agencies (ECAs) to be the most active lenders into African power projects – a critical part of infrastructure activity – in the next ten years, while 29% of respondents said that they expected that China based DFIs and ECAs would be the most active in Africa in the next decade.
The US Power Africa programme reported recently that since its inception five years ago it has funded 80 transactions valued at more than US$14.5 billion that are now either online, under construction, or have reached final close. The programme remains fully funded.
Still, IJGlobal data shows that out of all DFI investment flowing into African power projects in the past ten years, Chinese lenders provided more than half of it (53%), followed by multilateral development finance institutions (22%). US-based DFIs only contributed 3% of the funding.
The report notes that the decision by the US in October to turn the Overseas Private Investment Corporation (OPIC) into the International Development Finance Corporation and double its lending ceiling to $60 billion could significantly accelerate the race in Africa.
Du Plessis explains the reason for growing US lending in Africa, “The move is widely seen as a counter to Chinese largesse in Africa and other emerging markets.”
The report shows that the US is reportedly concerned about the security implications of China gaining control of strategic assets as a result of unsustainable borrowing by some developing countries. By increasing the flow of finance to Africa – and bolstering competition among DFIs – the new agency is likely to provide a boost to infrastructure activity in the region.
Yet despite the torrent of development finance lending from China, the US and others, sub-Saharan Africa’s infrastructure gap remains vast.
Jen Stolp, Global Head of Project Finance at Baker McKenzie highlights three priorities which are key to reducing the financing gap: “First, a move away from traditional funding, and recognition that alternative structures and new financial instruments are needed; second, increased focus on project preparation funding and the creation of credible and predictable regulatory environments; and third, increased support for private equity investment.”
The report outlines how both global and regional DFIs are becoming more innovative as they seek to bridge the infrastructure gap. Recently the AfDB bought insurance on a $1 billion loan portfolio from hedge funds, reducing the amount of capital it holds against loans and freeing up lending capacity. Meanwhile, Afreximbank has introduced an African fund for export development to attract more private equity, and a project preparation facility (PPF) to address project development-related constraints.
“The way in which DFIs, ECAs and commercial banks interact is also changing, with a growing emphasis on partnerships, especially on larger projects,” says Stolp.
The survey shows that greater cooperation between DFIs/ECAs and commercial banks leads to more projects being financed and that 60% of survey respondents think there is room for even more collaboration on infrastructure financings. A further 24% note cooperation allows commercial banks to participate in deals too risky to do alone.
“Deals may be fronted by – or may have tranches provided by – DFIs, thereby giving further support to commercial lenders,” agrees Baker McKenzie’s Global Head of Banking and Finance, Michael Foundethakis. “It’s important to remember that DFIs are able to go where commercial banks may fear to tread.”
By Kestér Kenn Klomegâh
From Africa’s perspectives on attaining economic sovereignty, Tanzania, located in East Africa, has seriously begun showing the investment model as Russia pledges tremendous support during the meeting of the Russian-Tanzanian intergovernmental commission in Arusha, in mid-May 2026. Russia is undertaking various development projects as well as addressing bilateral issues relating to investment, trade and innovation on the African continent, and described Tanzania as the gateway to the broader East African region.
Step 1: Gazprom is interested in implementing comprehensive gas projects in Tanzania, according to the report issued by the Ministry of Economic Development. It says Gazprom, in addition to selling natural gas, LNG, and petrochemical products, is ready to supply technologies and equipment for gas production, processing, transportation, and sales. It says Gazprom is continuing its work on a pilot project launched last year to supply two mobile gas tankers to Tanzania.
NOVATEK has also indicated its preparedness to participate in natural gas exploration and production projects in Tanzania, and for now, the staff are awaiting information on the date of the fifth round of license allocation for exploration blocks, as well as on the acquisition of blocks outside the tender process—specifically, at the Ntorya field. “Tanzania has significant resource potential, and the economy’s growing demand for electricity and fuel opens up significant opportunities for joint projects. The current situation in the Strait of Hormuz compels us to seek new solutions to ensure that it does not reduce economic growth on the African continent, and particularly in Tanzania,” said Maxim Reshetnikov, head of the Ministry of Economic Development, speaking at a meeting of the Russian-Tanzania intergovernmental commission in Arusha.
Step 2: Russia and Tanzania plan to sign a memorandum of cooperation in tourism in Moscow. In June, as part of the “Travel!” forum in Moscow (June 10-14), the Tanzanian delegation was already given the invitation to participate, noted Reshetnikov while further explaining that Russia is interested in launching direct air service between the two countries, which would “give a powerful boost to tourism development.”
Air Tanzania’s initiative to launch flights from Moscow to Dar es Salaam, with high hopes that Russia and Tanzania will complete the necessary procedures for the entry into force of the new air traffic agreement as quickly as possible. In particular, officials are awaiting notification from the Tanzanian side regarding the entry into force of this agreement.
Air Tanzania will begin flights from Dar es Salaam, Tanzania’s largest city, on May 28. According to the online flight information at the capital’s Vnukovo Airport, flights on this route will include a stopover on the island of Zanzibar. Flights will operate three times a week, on Tuesdays, Thursdays, and Saturdays. The program will run until October 24.
Step 3: Tanzanian President Samia Suluhu Hassan is expected on an official state visit to Russia in June, and that will boost bilateral trade and investment, and provide an additional impetus to developing mutual cooperation.
“In preparation for the upcoming high-level meeting, I propose discussing both promising areas and specific projects… and identifying key areas for further cooperation. In addition to trade, these include energy, transport, industry, agriculture, tourism, science, and education,” Reshetnikov said.
The Tanzanian delegation is expected to participate in the St. Petersburg International Economic Forum, which will be held from June 3 to 6. Usually, at the St. Petersburg forum, the African agenda is of great importance. The programme includes the Russia-Africa Business Dialogue, which, since 2016, has been the annual meeting place for representatives of Russian and African business and official communities. Roscongress Foundation organises it.
By Adedapo Adesanya
Infrastructure solutions provider, Africa Finance Corporation (AFC), has committed parts of a $100 million investment to fund managers—Future Africa and Lightrock Africa—to boost African tech venture backing.
The commitment to Lightrock Africa Fund II and Future Africa Fund III is the first tranche of a broader deployment, AFC noted.
The corporation added that it is actively evaluating a pipeline of additional Africa-focused funds spanning a range of strategies and stages, with further commitments expected in the near term.
This is part of its efforts to plug a persistent gap in long-term institutional capital on the continent, which constrains the development and scaling of high-potential technology businesses across the continent, especially with a drop in foreign investments.
“Through this commitment, AFC will deploy catalytic capital in leading Africa-focused technology Funds and, in particular, African-owned fund managers,” it said in a statement on Monday.
AFC aims to address the underrepresentation of local capital in venture funding by catalysing greater participation from African institutional investors and deepening local ownership within the ecosystem.
Despite some success stories on the continent, local institutional capital remains significantly underrepresented across many fund cap tables, with the majority of venture funding continuing to flow from international sources.
AFC’s commitment is designed to shift that dynamic, according to Mr Samaila Zubairu, its chief executive.
“Across the continent, young Africans are not waiting for the digital economy to arrive; they are seizing the moment — adopting technology, creating markets and solving real economic problems faster than infrastructure has kept pace. That is the investment signal.
“AFC’s $100 million Africa-focused Technology Fund will accelerate the convergence of growing demand, rapid technology adoption, youthful demographics and the enabling infrastructure we are building.
“Digital infrastructure is now as fundamental to Africa’s transformation as roads, rail, ports and power — enabling productivity, payments, logistics, services, data and cross-border trade, while creating jobs and industrial scale.”
Mr Pal Erik Sjatil, Managing Partner & CEO, Lightrock, said: “We are delighted to welcome Africa Finance Corporation as an anchor investor in Lightrock Africa II, deepening a strong partnership shaped by our collaboration on high-impact investments across Africa, including Moniepoint, Lula, and M-KOPA.
“With aligned capital, a long-term perspective, and a shared focus on value creation, we are well positioned to support exceptional management teams and scale category-leading businesses that deliver attractive financial returns alongside measurable environmental and social outcomes,” he added.
Adding his input, Mr Iyin Aboyeji, Founding Partner, Future Africa, said: “By investing in AI-native skills, financing productive tools such as phones and laptops, and expanding energy, connectivity and compute infrastructure, we can convert Africa’s greatest asset — its people — into critical participants in the new global economy. AFC’s US$100 million commitment is the anchor this moment demands.
“As our first multilateral development bank partner, AFC is sending a clear signal that digital is as fundamental to Africa’s transformation as agriculture, manufacturing and physical infrastructure. We trust that other development finance institutions, insurers, reinsurers and pension funds will follow AFC’s lead.”
By Adedapo Adesanya
Dangote’s East African refinery plan gained momentum as Ugandan President Yoweri Museveni threw his support behind the proposed project following talks with Mr Aliko Dangote.
In a tweet posted on X (formerly Twitter) on May 17, 2026, the Ugandan President announced that he had met with the Nigerian billionaire at Nakasero, and revealed that the meeting centred around the development of a proposed 650,000 barrels per day regional oil refinery in East Africa.
Mr Museveni emphasised adding value by refining oil locally rather than exporting crude, to maximise economic and strategic benefits for the region.
He called for greater regional cooperation and market integration in East Africa, highlighting the importance of large-scale projects for shared prosperity.
Business Post has earlier reported that Kenya has been positioned as the central player following Tanzania’s recent denial of its support of the project.
Mr Dangote said the East African country was his preferred choice due to its established fuel logistics network and port infrastructure serving several neighbouring countries.
In the latest development, the Ugandan president explained that his primary focus remains on value addition.
He detailed why Uganda has historically refrained from exporting raw crude oil, arguing that doing so allows foreign entities to exploit the country’s natural resources and reap the financial rewards of refined products.
“Without refining our oil, it would not make economic or strategic sense to simply export crude oil while others benefit from the finished products,” Mr Museveni stated.
The president expressed strong support for a larger regional refinery, describing it as a crucial step toward “African integration and shared prosperity.”
He further emphasised that East African nations must move past an individualistic mindset and overcome fragmented markets, urging regional cooperation to execute large-scale projects that benefit the entire populace.
“We cannot continue operating in fragmented and weak markets,” Mr Museveni wrote. “If East Africa works together, such projects become more viable and beneficial to our people.”
“Uganda is ready to support the regional refinery initiative while also continuing with the development of our own refinery in Hoima,” he added.
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