No surprise perhaps for those who have been reading the Chinese tea leaves of late, but Chinese investors are not disbursing funds for large scale African infrastructure projects, particularly capital- intensive natural gas and oil pipelines, as they had liberally been doing the previous ten years.
A spokesman for state oil company NNPC, which is building the 614-km Ajaokuta-Kaduna-Kano (AKK) pipeline, said it was still negotiating with the Chinese lenders - Bank of China and Sinosure - to cover $1.8 billion of the project cost.
The Nigerian National Petroleum Corporation (NNPC), trying to put a brave face on the delicate matter, said "there’s no cause for alarm.”
Nevertheless, according to Reuters, Nigeria has started to look for alternative funding for at least US$1 billion of the pipeline’s cost and has started to approach other lenders, including export-import credit institutions. The Chinese lenders feel too exposed to Nigeria right now, one of Reuters’ sources said, while a spokesman for NNPC told Reuters the Nigerian state oil and gas firm was still in talks with Bank of China and Sinosure for the loans.
NNPC, which was funding 15%, said last year it had used its own funds to start construction. The sources said the Chinese lenders would not agree to disburse the cash NNPC had expected by the end of the summer, prompting it to turn to others.
China’s lenders signed 1,141 loan commitments worth US$153 billion with African governments and their state-owned enterprises between 2000 and 2019, according to estimates from the China Africa Research Initiative at Johns Hopkins University’s School of Advanced International Studies (SAIS-CARI). Transport was the largest sector in which Chinese financiers backed projects in Africa, with US$46.6 billion between 2000 and 2019, followed by the power sector with US$38 billion and the mining sector with US$18.4 billion.
The data shows that between 2000 and 2019, China disbursed 19 loans worth a total of US$6.7 billion to Nigeria and its state-owned firms, with the transport sector leading, followed by the power sector.