The Asian Infrastructure Investment Bank’s enlargement in Africa: Understanding the loans to Egypt and Rwanda

Arsénio Castro Zandamela

Arsénio Castro Zandamela graduted from High Institute of International Relations in 2011. In 2016, he earned his master’s education at the Eduardo Mondlane University, Department of Political Science and Public Administration. Zandamela continues his doctoral studies at the Department of International Politics at Shandong University, China. His research interest include the institutionalism program with focus on China’s participation in International Economic Institutions, with concentration on the Asian Infrastructure Investment Bank; China’s multilateral relations with the Africa countries; He also pays attention to topics such as: Governance and international relations theory. Zandamela is fluent in Portuguese, English and a beginner in Chinese.

In the last June, Rwanda secured a $100 million loan from the Asian Infrastructure Investment Bank (AIIB)[i] repeating what had happened only to Egypt in Africa.  These loans from the AIIB to African countries are resuming the debates on the scope and objectives of the AIIB. Since its inception in 2016, the AIIB is accused to aim at operating as a lender into a global institution similar in structure to the World Bank (WD) and International Monetary Fund (IMF). Since the AIIB is an Asian regional Bank, in fact, one might ask – why an Asian regional bank is lending to African countries and what comes next? To go through the above questions is needed to focus on the big picture of the AIIB.

The AIIB is a multilateral development bank whose mission is financing the Infrastructure. Its major focuses on infrastructure projects are energy and power, transportation and telecommunications, rural infrastructure and agriculture development, water supply and sanitation, environmental protection, urban development and logistics. It is a China-led bank with headquarters in Beijing. China owns 30.89 per cent of the shares, and holds 26.65 per cent of the voting power. The second-largest shareholder of the bank is India, with 8.67 per cent of the shares and 7.65 per cent of the voting power, followed by Russia, Germany, South Korea and France. The member countries of the AIIB comprises 103 approved members worldwide (45 regional, 38 non-regional and 20 prospective)[ii].

The AIIB’s enlargement in Africa that counts with ten members and nine prospective members is part of AIIB internationalization since its inception. The AIIB was created having members from worldwide including many Western European countries, such as the United Kingdom, France, Germany, and Italy[iii]. That said the AIIB is not acting different from other regional banks’ approaches. For instance, the Asian Development Bank (ADB) established in 1966, encompasses 68 members—of which 49 are from within Asia and the Pacific and 19 outside.[iv] The European Bank for Reconstruction and Development (EBRD), established in 1991 comprise 60 countries — countries such China, India, Egypt and Mexico are members of the EBRD. The EBRD is operating in three continents – Europe, Asia and Africa, with investments in Mongolia, through Central Asia, Russia, Central and Eastern and South Eastern Europe, Turkey and in the Southern and Eastern Mediterranean region.[v] The African Development Bank (AfDB or ADB) was created in 1964, it encompass 81 members being only 54 from Africa.[vi]

Considering that other regional banks have non-regional members and some of them have also financed projects outside their regions, what then places the AIIB under the holophotes? It might be due to criticism raised by the United States (US), and because the US and Japan refused to join the Bank. The US also accuses the AIIB of lack of transparency which might dilute their efforts to promote transparency and social and environmental standards in development financing. Critics also have alleged it is more than an infrastructure bank, but rather is a tool for the Chinese government’s overseas development goals. Yet, the AIIB specializes in infrastructure whereas the other organizations do not. The AIIB is to all purposes compatible with international practices of a regional bank as set forth earlier.[vii]

However, on another side, it might make sense the US and Japan’s suspicion toward the AIIB on their perspective because it looks that the AIIB will play broader role than the other regional banks, and will make irrelevant the ADB. The AIIB is bigger both in terms of number of members (103), it is still growing, and in terms of authorized capital ($100 billion)[viii], equivalent to about half that of the WB, with a loan portfolio of $90–127 billion by 2025.[ix] Moreover, one also cannot ignore that the creation of the AIIB is part of China’s enhancement for international status in Asia and worldwide. The ongoing global and regional competition between the US and China might explain the US posture. The US would rather China to operate within the existing institutions, rather than create new ones because of fearing that China disrupts the current financial order. Nonetheless, China criticizes the way the WB, IMF and ADB operate, and the overwhelming power from the US and Japan. It aims at offering alternatives financing in Asia and beyond.

It is within this wider context that it is explained the AIIB recent loan to Rwanda that joined the Bank only in 2020 and to Egypt. The Rwanda project is co-financed by Rwanda’s government ($101 million), the WB ($150 million), and the AIIB ($100 million).[x] In Egypt, three projects have been invested by the Bank in 2017, 2018 and 2019, all worth $700 million[xi]. Furthermore, according to the AIIB’s articles, recipients of AIIB financing may include member countries, as well as international or regional agencies concerned with the economic development of the Asia-Pacific region.[xii] That is, Egypt and Rwanda are eligible to be recipients of the AIIB financing. Further, these two countries fit to AIIB’s goal of gaining international legitimation because of their need of financing and their pathway in economic growth which may serve as propaganda of AIIB’s loan. To this purpose, the AIIB is working out with the WB both in Egypt and Rwanda to deliver loans. The AIIB is benefiting from WB’s countries presence for aspects such as analysis of environmental and social risk and surveillance of implementation.

The trends of AIIB enlargement and financing in Africa will continue because of four major reasons. Firstly, the AIIB cannot discriminate against members whenever they fulfill the requisites to get the loans. Secondly, the AIIB intends to become a really complementary and an alternative bank to the existing ones, such as the IMF and World Bank, but collaborating with them including AfDB. Thirdly, although the issue with regard to AIIB independence is a never-ending debate, none can deny the importance of China to the Bank. China wants to be seen as a responsive global actor by helping to fill gaps where others are not interested or do not have capacity to do so. And it is doing that both bilaterally and multilaterally.  Furthermore, Africa’s total infrastructure needs amount to $130-170 billion a year, with a financing gap in the range of $68-108 billion. This huge gap to finance infrastructure projects in Africa, makes the AIIB fascinating to many African countries, hence it is expected that the other African countries seek to join the AIIB to get loans.

[i] “Rwanda: Support to COVID-19 Economic Recove,ry Fund for Private Sector”, Asian Infrastructure Investment Bank,, (Date of Accession: 25.082021).

[ii] Ergun, Safiye, “Chinese engagement in Africa through the Asian Infrastructure Investment Bank” Middle East Technical University, 2019, p. 66., (Date of Accession: 24.08.2021).

[iii] Jeffrey D. Wilson, “The evolution of China’s Asian Infrastructure Investment Bank: from a revisionist to status-seeking agenda”, Asia Research Centre, 2017, p.152., (Date of Accession: 24 August 2021); Amitai Etzioni, “The Asian Infrastructure Investment Bank: A Case Study of Multifaceted Containment”, Asian Perspective, 40, 2016, p. 174,, (Date of Accession: 23.08.2021).

[iv] “ADB History”, Asian Development Bank,, (Date of Accession: 24.08.2021).

[v] “EBRD impact on countries of operations”, European Bank for Reconstruction and Development,, (Date of Accession: 23.08.2021).

[vi] “Countries”, African Development Bank,, (Date of Accession: 24.08.2021).


[viii] “Articles of Agreement”, Asian Infrastructure Investment Bank,, (Date of Accession: 23.08.2021).

[ix] Humphrey, Chris, Developmental Revolution or Bretton Woods Revisited?, Overseas Development Institute, London 2015.

[x] “Rwanda: Support to COVID-19 Economic Recovery Fund for Private Sector”, AIIB,, (Date of Accession: 24.08.2021).

[xi] “Our Projects”, Asian Infrastructure Investment Bank,, (Date of Accession: 24.08.2021).

[xii], (Date of Accession: 23.08.2021).

Opinions expressed in this article are the author’s own and do not necessarily reflect the editorial policy of The Asia Today.

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