China-backed development bank AIIB makes first move into Sub-Saharan Africa

The Asian Infrastructure Investment Bank has approved its first project in sub-Saharan Africa.
The Asian Infrastructure Investment Bank has approved its first project in sub-Saharan Africa.
Image: REUTERS/SIPHIWE SIBEKO

The China-backed Asian Infrastructure Investment Bank (AIIB) approved its first project in sub-Saharan Africa on Thursday, adding to a growing list of international development banks now moving into the continent.

The Beijing-based AIIB, which began operations in 2016, said its would provide a $100 million loan to Rwanda in east Africa as part of a broader COVID-19 Crisis Recovery Facility it set up last year.

AIIB economist Suzanne Shaw said the move, which is co-financed with World Bank in Washington, demonstrated the AIIB's "relevance and value to its non-regional members during a time of severe crisis and need".

Since its launch five years ago the AIIB has spent just over $21 billion on projects . It has 103 governments as shareholders, although unlike most big development banks that does not include the United States, or Asia's second-largest economy, Japan.

It is now though joining a growing scrum of multilateral institutions looking to expand into sub-Saharan Africa.

The resource-rich region is seen as having growth potential, but the International Monetary Fund estimates it will need an additional $425 billion between now and 2025 just to fight COVID-19 and reduce poverty levels that have been exacerbated by the pandemic.

The AIIB might find itself elbowing for space however.

Last month, top G7 development banks - a group that does not include China - made a landmark joint pledge to pump $80 billion into African companies and projects over the next five years.

The African Development Bank, Afreximbank and Islamic Development operate there too, while the London-based European Bank for Reconstruction and Development is looking at expansion there again after putting earlier plans on ice last year.

Would you like to comment on this article or view other readers' comments? Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.