China leads new financiers in Africa-World Bank

By Lesley Wroughton

WASHINGTON, July 10 (Reuters) - China is ramping up financing for power and transport projects in Africa, with the majority in four countries endowed with natural resources, according to a report by the World Bank on Thursday.

The report, which looks at the growing role of the Chinese government as a financier of infrastructure projects in Africa, estimates China's funding for roads, railways and power projects peaked at $7 billion in 2006 from just $1 billion a year between 2001-03.

The bulk of those commitments were to Nigeria, Angola, Sudan and Ethiopia and is welcome in a region where only one in four Africans have electricity, and travel along major export routes takes two to three times longer than in Asia.

But the World Bank said China was not the only emerging economic power financing infrastructure projects in Africa. India's Ex-Im Bank and Arab development funds are doing the same although China is by far the largest, it said.

In the power sector, China's investments have been in large hydropower schemes, and at the end of 2007 it was contributing $3.3 billion to 10 major hydropower projects amounting to some 6,000 megawatts of installed capacity.

When completed, these projects will raise total available hydropower generation capacity in Sub-Saharan Africa by around 30 percent, the Bank said.

Meanwhile, China's financing agreements to develop rail links, mainly in Nigeria, Gabon and Mauritania, totaled about $4 billion in 2007. This includes rehabilitation of more than 1,350 km of existing railway lines and construction of more than 1,600 km of new railroad. Africa's entire rail network is about 50,000 km.

Obiageli Ezekwesili, World Bank Vice President for Africa, said China's investments are helping fill $22 billion a year in financing needs for roads, railways and power across Africa.