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 .
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.
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.