China has turned to public-private partnerships (PPP) to finance big African infrastructure projects under a grand China investment initiative, a shift experts said could reduce Beijing’s financial risks while easing debt pressures on African countries.
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By granting Chinese companies long-term operating rights in exchange for construction financing, the model represents a pivot from direct government loans through China’s policy banks under its Belt and Road Initiative, Beijing’s plan to build global trade and infrastructure links.
From Nairobi’s mega-highway and stalled railway to Zambia’s Lusaka-Ndola dual carriageway, Beijing is encouraging its companies and financiers to use PPP models for major projects that African governments previously avoided due to debt concerns – described by analysts as a “yellow brick road” for sustaining infrastructure development.
The financing shift appears across several high-profile projects.
During Kenyan President William Ruto’s visit to China last month, he sought Chinese funding to extend the country’s Standard Gauge Railway (SGR) to Malaba on the border with Uganda.
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Under one plan, Chinese infrastructure financiers would contribute 40 per cent of the 32 billion yuan (US$4.5 billion) needed to build the 475km (295-mile) rail line and Chinese contractors would have exclusive rights to construct and operate the railway for a minimum of 25 years after completion to recoup their investment through toll fees.