Chinese lending to African nations has significantly declined, with a shift occurring in how renewable energy projects are financed and a rise in repayments exceeding new loans. From 2000 to 2024, 42 Chinese lenders provided $180.87 billion in 1,319 loans to 49 African states and seven regional entities.
Decline in Chinese Credit
This represents a dramatic decline from the early 2010s, when Chinese credit routinely exceeded $10 billion annually.
These loans have supported nearly 900 projects worth $316 billion in sectors including transportation, power, water and sanitation, and digital infrastructure, contributing to economic growth, public assets, and poverty reduction.
Lending continues to prioritize transportation, energy transmission, water and sanitation, and financial services – areas struggling to attract private investment. Meanwhile, fossil fuel projects, electricity-generating projects, and ICT projects received almost no fresh loans in 2024.
Renewable energy projects are increasingly funded through foreign direct investment (FDI) or trade methods, rather than traditional sovereign debt.
Shifting Financial Dynamics
In Kenya, all infrastructure loans in 2024 were denominated in RMB, a departure from the USD-dominated borrowing of the 2010s.
Developing countries are increasingly repaying more to China than they borrow, resulting in net outflows. A Boston University analysis found that net debt transfers from China to developing countries fell in 2022 and 2023, with governments repaying $3.9 billion more each year than they received in new loans.
This trend places further strain on economies already grappling with debt and underinvestment in climate-related infrastructure.
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