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