TRENDSAND POLICY OPTIONS M No. 5 HELPINGTO ELIMINATEPOVERTY THROUGHPRIVATE INVOLVEMENTIN INFRASTRUCTURE China's Growing Role as Infrastructure V.Y^ Financier for Sub-Saharan Africa VivienFoster William Butterfield ChuanChen NataliyaPushak THEWORLDBANK PUBLIC-PRIVATEINFRASTRUCTUREADVISORYFACILITY Copyrightedmaterial TRENDS AND POLICY OPTIONS S No. 5 HELPINGTO ELIMINATEPOVERTY THROUGHPRIVATE INVOLVEMENTIN INFRASTRUCTURE Building Bridges China's Growing Role as Infrastructure Financier for Sub-Saharan Africa Vivien Foster William Butterfield Chuan Chen Nataliya Pushak [efflH] THEWORLDBANK HPPIAF PUBLIC-PRIVATEINFRASTRUCTUREADVISORYFACILITY Copyrightedmaterial ©1812800H9TSthreeeItnNteWrnationalBankforReconstructionandDevelopment/TheWorldBank WashingtonDC20433 Telephone:202-473-1000 Internet:www.worldbank.org E-mail:[email protected] Allrightsreserved 123451211 1009 ThisvolumeisaproductofthestaffoftheInternationalBankforReconstructionand Development/TheWorldBank.Thefindings,interpretations,andconclusionsexpressedin thisvolumedonotnecessarilyreflecttheviewsoftheExecutiveDirectorsofTheWorld Bankorthegovernmentstheyrepresent. TheWorldBankdoesnotguaranteetheaccuracyofthedataincludedinthiswork.The boundaries,colors,denominations,andotherinformationshownonanymapinthiswork donotimplyanyjudgementonthepartofTheWorldBankconcerningthelegalstatusof anyterritoryortheendorsementoracceptanceofsuchboundaries. RightsandPermissions Thematerialinthispublicationiscopyrighted.Copyingand/ortransmittingportionsorall ofthisworkwithoutpermissionmaybeaviolationofapplicablelaw.TheInternational BankforReconstructionandDevelopment/TheWorldBankencouragesdisseminationof itsworkandwillnormallygrantpermissiontoreproduceportionsoftheworkpromptly. Forpermissiontophotocopyorreprintanypartofthiswork,pleasesendarequest withcompleteinformationtotheCopyrightClearanceCenterInc.,222RosewoodDrive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com. Allotherqueriesonrightsandlicenses,includingsubsidiaryrights,shouldbeaddressed totheOfficeofthePubhsher,TheWorldBank,1818HStreetNW,Washington,DC20433, USA;fax:202-522-2422;e-mail:[email protected]. ISBN:978-0-8213-7554-9 e-ISBN:978-0-8213-7555-6 DOI:10.1596/978-0-8213-7554-9 LibraryofCongressCataloging-in-PublicationData Foster,Vivien,1968- Buildingbridges:China'sgrowingroleasinfrastructurefinancierforAfrica/Vivien Foster,WilliamButterfield,andChuanChen, p.cm.— (Trendsandpolicyoptions;no.5) Includesbibliographicalreferences. ISBN978-0-8213-7554-9-ISBN978-0-8213-7555-6(electronic) 1. China—Foreigneconomicrelations—Africa,Sub-Saharan.2. Africa,Sub-Saharan—For- eigneconomicrelations—China.3. Investments,Chinese—Africa,Sub-Saharan.4. Infra- structure(Economics)—Africa,Sub-Saharan. I.Butterfield,William.II.Chen,Chuan.III. Title. HF1604.Z4A35742008 338.91'5106-dc22 2008023785 Copyrightedmalerial CONTENTS AUTHORS ix ACKNOWLEDGMENTS x OVERVIEW xi GLOSSARYOFTERMS xx ABBREVIATIONSANDACRONYMS xxi 1. INTRODUCTION 1 2. CHINA'SGROWINGTIESWITHSUB-SAHARANAFRICA 3 3. METHODOLOGY 9 ExistingInformationSources 9 ANewProjectDatabase 11 4. THEEMERGENCEOFCHINESE INFRASTRUCTURE FINANCE 16 HeadlineNumbers 16 Sector-by-SectorView 19 Power 21 Rail 23 Roads 23 ill Copyrightedmalerial InformationandCommunicationTechnology 24 WaterandSanitation 25 Country-by-CountryView 25 Nigeria 25 Angola 26 Ethiopia 27 Sudan 28 5. ECONOMICCOMPLEMENTARITIES BETWEENCHINA ANDSUB-SAHARANAFRICA 29 TheInfrastructureSide 30 TheNaturalResourceSide 37 6. THEFINANCING PERSPECTIVE 52 TheRoleofChinaEx-ImBank 52 FinancingTerms 58 CountryIndebtedness 62 7. THECHANGING LANDSCAPEOFINFRASTRUCTURE FINANCE 66 OtherNon-OECDFinanciers 66 ComparisonofOECDandNon-OECDFinance 68 8. CONCLUSION 73 BIBLIOGRAPHY 75 ANNEXES Annex1.MethodologyforSearchingFactivaDatabase 79 Annex2.MethodologyforCreatingProjectDatabase 82 Annex3.SummaryofChinese-FundedInfrastructure 85 ProjectsbySector Annex4.SummaryofChinese-FundedInfrastructure 110 ProjectsforSelectedCountries Annex5.SummaryofChinese-FundedNatural 120 ResourceProjects iv Contents Copyrightedmaterial BOXES 1 AbriefhistoryofSino-Africanengagement 5 2 Chineseinvolvementinpetroleumsectordevelopment inNigeria,Angola,andSudan 49 FIGURES 1 Chinesetradewithandforeigndirectinvestmentin sub-SaharanAfrica 4 Chineseforeigneconomiccooperationinsub-Saharan Africa,2002-05 10 Chinese-financedinfrastructureprojectsinsub-Saharan Africathatcouldbevalidatedfromdifferentsources, 2001-07 15 EstimatedvalueofChineseinfrastructurefinance commitmentsinsub-SaharanAfrica,2001-07 17 NumberandsizedistributionofChinese-financed infrastructureprojectsinsub-SaharanAfrica,2001-07 18 ConfirmedChineseinfrastructurefinancecommitments insub-SaharanAfricabysector,2001-07 22 ConfirmedChineseinfrastructurefinancecommitments insub-SaharanAfricabycountry,2001-07 26 Percentagevalueofmultilateralcivilworkscontracts insub-SaharanAfricacapturedbyforeigncontractors accordingtotheircountryoforigin,2005-06 35 Sectoralandgeographicdistributionofmultilateral civilworkscontracts 36 10 Trendsinsub-SaharanAfricanshareofexportsofselected naturalresourcesgoingtoChinaandothermajortrading partners,2001-06 38 11 Sub-SaharanAfricanshareofChina'simportsofselected naturalresources,2001-06 39 12 China'soilimportsbysource,forallregionsandfor sub-SaharanAfrica,2001-06 40 13 NaturalresourceexportstoChinabyselected sub-SaharanAfricancountries,2001and2006 42 Contents Copyrightedmaterial CountrysharesofChinesenaturalresourceinvestment andfinancecommitmentsintopowerandtransportin sub-SaharanAfrica,2001-07 Chineseinfrastructurefinancecommitmentsin sub-SaharanAfricabysourceandtype,2001-07 CommitmentsbyChinaEx-ImBank,2001-06 Structureof"Angolamode"arrangement AveragegrantelementofChineselendingtoselected sub-SaharanAfricancountries,2002-06 Non-OECDinfrastructurefinanceinsub-SaharanAfrica, 2001-07 Externalinfrastructurefinanceinsub-SaharanAfrica, 2001-06 Externalinfrastructurefinancebysectorinsub-Saharan Africa,2001-06 Sectoralspecializationofexternalsourcesofinfrastructure financeinsub-SaharanAfrica,2001-06 Geographicspecializationofexternalsourcesof infrastructurefinanceinsub-SaharanAfrica EstimatedupperboundofChineseinfrastructurefinance commitmentsinsub-SaharanAfrica,2002-05 Chinesefinancingcommitmentsintoinfrastructureprojects insub-SaharanAfrica,byyearofcommitmentandstatus atendof2007 Top 10Chineseinfrastructureprojectcontractorsactive insub-SaharanAfrica,2001-07 EconomiccomplementaritiesbetweenChinaand sub-SaharanAfrica Indicatorsofinfrastructuredevelopmentinsub-Saharan Africaandotherdevelopingregions Impactofunreliableinfrastructureservicesonthe productivesector 7 Estimatedannualinfrastructureinvestmentand maintenanceneedstomeetMillenniumDevelopment Goalsinsub-SaharanAfrica,2005-15 8 ShiftingpatternsofSino-Africantradeinselectednatural resources 9 Chineseinvestmentcommitmentsinnaturalresource sectorinsub-SaharanAfrica,2001-07 10 Chinese-financedinfrastructureprojectslinkedtoChinese naturalresourcedevelopmentprojects 11 Chinese-financedinfrastructureprojectsbackedbynatural resources,2001-07 12 Chinesegrant-financedinfrastructureprojectsin sub-SaharanAfrica,2004-07 13 AveragetermsofallChineseofficialloanstovarious sub-SaharanAfricancountries,2002-06 14 FinancingtermsofferedbyChinaandothercreditorsto sub-SaharanAfricaandalldevelopingcountries,2002-06 15 ComparisonofdebtreliefwithChineseloancommitments, 2000-07 A3.1 OverviewofChinesefinancingcommitments inconfirmedpowerprojectsinsub-SaharanAfrica, 2001-07 A3.2 OverviewofChinesefinancingcommitmentsin confirmedtransportprojectsinsub-SaharanAfrica, 2001-07 A3.3 OverviewofChinesefinancingcommitmentsin confirmedICTprojectsinsub-SaharanAfrica,2001-07 A3.4 OverviewofChinesefinancingcommitmentsin confirmedwaterprojectsinsub-SaharanAfrica, 2001-07 A3.5 OverviewofChinesefinancingcommitmentsin confirmedmultisectorprojectsinsub-SaharanAfrica, 2001-07 A4.1 Chinesefinancingcommitmentsininfrastructure projectsinNigeria,2001-07 A4.2 Chinesefinancingcommitmentsininfrastructure projectsinAngola,2001-07 114 A4.3 Chinesefinancingcommitmentsininfrastructure projectsinEthiopia,2001-07 116 A4.4 Chinesefinancingcommitmentsininfrastructure projectsinSudan,2001-07 118 A5.1 Chinesefinancinginterestsinconfirmednatural resourceprojects 121 viii Contents Copyrightedmaterial