EXIM Bank Commits To Funding Economically Viable Projects in Liberia
Beijing, China – The Export – Import Bank of China or EXIM Bank has reaffirmed its commitment to the economic development of Liberia but places “high attention” to projects that are economically viable for the West African nation.
Report by Alpha Daffae Senkpeni – [email protected]
The bank’s cooperation with African countries focuses on solving problems by initiating projects that are sustainable for development, said Yuan Xingyong, EXIM Bank vice President.
It has cooperated with African countries since 1996, lending over US$100 billion for development projects in Uganda, South Sudan, Kenya, Zambia, Malawi, Morocco, and Cameroun amongst others.
They include hospital, education, roads, rails and power generation projects.
‘Symbol of Friendship’
The bank is currently funding a US$50 million loan for the modernization of Liberia’s Roberts International Airport – an “on course infrastructure project” – regarded as a “symbol of friendship” between the People’s Republic of China and the Republic of Liberia.
The financing agreement was signed between the bank and the Liberian government on October 3, 2016, and work has begun since this year.
“We also believe that the project will be a new landmark for Liberia and will also be the symbol of friendship between China and Liberia,” said Zhang Shou, the bank’s deputy general manager for concessional loan.
Zhang was responding to questions during a press conference in Beijing on September 22 about the bank’s future relationship with Liberia as the country prepares for a political transition following this year’s Presidential election.
“China EXIM Bank values its cooperation with Liberia; we all hope that the Presidential election goes smoothly and that the new government will maintain political stability and maintain the friendly diplomatic relations with China to laid a good foundation for China-Liberia cooperation,” she said.
The bank is a major player of the Forum on China-Africa Cooperation (FOCA), which strengthens China links with Africa with focus on10 major development projects deliberated in 2015 at the FOCAC Johannesburg summit.
It plays a crucial role in promoting steady economic growth and structural adjustment, supporting foreign trade, and implementing the “going global” strategy for China.
‘Debate Carrying Capacity’
“The bank is willing to, under the framework of FOCAC and the guidance of the Chinese government, discuss potential cooperation with Liberia while considering the debt carrying capacity,” Zhang said, adding that the bank’s first priority is funding projects that are sustainable.
She said the bank considers Liberia’s economic sustainability through viable projects and hope “the Liberian side will choose projects that are viable” to promote the economic and social development of the long term.
The fear of incurring debts that leave behind little sustainable economic development for Liberians continuous to resonate after a weaver of US$4.9 billion by the International Monetary Fund (IMF) and other lenders back in 2007.
China has shown commitment to helping Liberia alleviates its development challenges, but is also wary of any lapses that may pile up debate without means of repayment.
“We do not want to see that the loan provided or financial support by China becomes a burden of our African friends,” Zhang said.
She continued: “So we place high attention to the project which are economically viable and can reap good economic benefits because on one hand, that the project can bring social and economic benefits to our African friends, and on the other hand, those projects can pay back loans from cash generated by the projects itself. And it will not be a burden of the African countries.”
Weng Fei, deputy manager for strategy and planning, said the bank is aware of potential risks before conducting business with countries.
He said there are measures to evaluate the political and social condition of a country including forecasting the risks before moving in.
However, the bank insists it is commitment to “flexible financing” by creating suitable modules suitable from one country to another and bring in technical human resource to ensure projects are adequately executed.
And the bank vice President said Africa’s economy and trade are showing improvements because political environment are “becoming stable and creating better business environment amid urgent development demands”.
Yuan described the continent as a “bright spot for investment” evident by the over US$100 billion trade and economic deals and the presence of more than 3,000 Chinese companies.
He said the bank “embraces the principles of transparency” and has signed 10 deals including railway, airports and roads projects with African countries as part of the Belt and Road Initiatives.
The bank has funded another airport project in Zimbabwe – expected to boost the country’s tourism; a hydro power project in Guinea, another power project in Ethiopia to promote export of electricity to countries in the region and Nairobi to Mombasa railway in Kenya, which is enhancing the economic trend of the East African nation.
“We respect efforts by African countries and we maintain fairness in conducting business, respect local culture and to improve development in practical ways,” Yuan said.